The Bhutanese Leading the way.
With a growing number of individuals opting to buy from online businesses, which operate without the heavy burden of taxes or rent typically faced by shopkeepers, the traditional market is at risk.
These home-based businesses operate from TikTok, a social media platform that has been rapidly gaining popularity in Bhutan.
A shopkeeper in Wangdue states, “I own a shop and pay my rent, my staff, and taxes on time. What these TikTok sellers do is avoid paying all these expenses that we as shopkeepers have to make, and then offer competitive prices by giving discounts because they do not have to pay Business Income Tax and Customs Duty and the rent since they operate from home.”
Another shopkeeper in Bumthang shared that she had to function on multiple losses due to an online shop selling similar products at a very competitive rate.
Traditional shops in Bhutan are required to register, obtain a business licence, and follow various tax laws. However, home-based businesses often fly under the radar, selling their goods without registering with the government.
This means they do not have to pay sales taxes or other business-related fees, which can be a major financial relief, especially for those just starting out or operating with limited resources.
A home-based business owner in Phuentsholing makes roughly Nu 35,000 in profit every time the person goes live on the platform to sell a wide range of products at competitive prices.
For many of these vendors, saving on shop rent is one of the biggest advantages. Unlike shopkeepers who must pay monthly rent for physical store locations, these sellers set up an online TikTok account and start selling their products while going live, reducing their overhead costs significantly.
A few customers claim that they prefer online shopping because they are offered products at a discounted rate compared to the physical shops.
As buyers are always on the lookout for affordable products, home-based businesses provide a wide range of options for them.
Talking to an official from the Department of Revenue and Customs, he shared that such businesses might be advantageous, in terms of the unemployment rate, but since they do not have to pay the rent and the taxes, it will directly or indirectly affect the country’s economy.
As businesses in the country continue to recover from the pandemic, balancing the needs of informal businesses with the rights of formal businesses will be key to maintaining a fair and thriving economy for all.
