The Bhutanese Leading the way.
One of the most significant legislations of the government is the revised Property Tax Act of Bhutan where land and house taxes have been significantly revised.
The Prime Minister Dasho (Dr) Lotay Tshering talking about the land tax said a five-acre land in all parts of the country was paying Nu 60 at Nu 12 per acre before, and it will now be a few thousands, but the same five-acre land in Babesa and Taba will be around Nu 1.6 mn a year.
He said the farmer in Thrimshing should be happy to pay Nu 1,600 to Nu 1,800 as the same law allows the government to collect Nu 1.6 mn in Thimphu.
“A few families in Thimphu will have to pay Nu 3 mn plus per year as they have 20 to 30 acres,” said the PM.
He said people are complaining because until now they were paying 60 and now they have to pay Nu 2,000 which is a big jump, but he said the Act also says all the revenue will be deposited in the Ministry of Finance Account and not the Local Government account, and when they come into government the money will mainly be spent on public infrastructure like health, road, water and infrastructure.
The PM said proportionately the poor will benefit more and those paying 3 mn will not benefit much out of the taxes. He said for health they are going out, they have 24/7 water, road is till the house and kids are in international schools.
“The criticism is like a pack of dogs barking when one starts barking, but it is okay. When I look at it closely the Property Tax decision is one of the best decisions,” said the PM.
He said the Tax to GDP ratio of OECD countries is 35% and it is 48 to 49% in Scandinavian countries but Bhutan’s tax to GDP ratio is about 12%.
“Many Bhutanese are complaining and shouting on social media saying this is my tax money but it is only 12% of GDP.”
The PM said we have very high CIT and BIT taxes but property tax was so low that it did not even make it to the graph.
He said there is direct and indirect tax and for proper redistribution from the direct tax there should be higher property tax because it is only property and you pay only if you have property and it is value based.
“This is one one of the biggest trends that we have started in motion,” said the PM.
I am with the Government of the day in this case. AS rightly said by His Excellency, the PM, property tax is the best decision. Till now rich people with lot os land have been paying nothing to the government as Tax. now the government will have enough revenue compared to past years…
Thank you, Your Excellency….