Tax (Amendment) Bill of Bhutan 2020 removed post-paid 7 percent tax proposal

After a thorough deliberation on 30 January, the National Assembly of Bhutan made amendments and adopted Tax (Amendment) Bill of Bhutan.

The sales tax rate for the tourist SIM card was agreed at 7 percent, while an exemption was made for local post-paid users who were earlier charged with 7 percent too. Prepaid voucher users will get the exemption as per the amendment in the Bill.

The National Assembly also adopted the Income Tax Amendment Bill 2020 as on 30 January. Personal Income Tax (PIT) exemption ceiling has been increased to Nu 300,000 while Personal Income Tax for pensioners and income tax from cash crops have been exempted.

The House decided for the corporate income tax cut for private companies from 30 percent to 25 percent. There will be further deliberations on the Bill in the National Council.

During the discussion, Khamaed MP, Yeshey Dem, proposed for tax rates to be exempted for those using mobile services below Nu 500 and 5 percent for people using above Nu 500 in concern of working towards attaining equity rather than equality, reportedly.

The point was brought under keen interest for sometime as many respective participants showed interest and answered to it. Panbang MP, Dorji Wangdi, and others shared concerns over certain taxation proposals as to how it needed stronger clarification from the government.

In terms of pre-paid service exemption and postpaid being proposed with tax rate implications, he reinstated to the floor about environmental consequences while for the CIT tax drop of 30 percent to 25 percent, he saw it as an unfavorable move.

In response to Lunana MP’s proposal, the MoIC Minister stated that it would be nice to have such taxation policy where the mobile service tax payers could bear tax rates in accordance to their own voucher consumptions, however, it would be an extra hassle to track down each individual’s voucher consumption and to keep tabs of such activity, he said. A lot of infrastructure and manpower costs would have to be borne by the government, he added.

Some MPs stated that according to their meeting with the public, the people were reportedly ready to bear the 5 percent tax on mobile vouchers if it helped generate some revenue towards the government.

Finance Minister clarified as to why the proposal for post-paid users was made with statistical figures showing that only a handful post-paid users were in the country, and for the greater economic good of narrowing the gap, it wouldn’t have mattered as much he said.

One of the MPs proposed for the government to look into the high date consumption rate and cost, especially as public opinion on high data consumption of Tashi Cell and B Mobile were evident.

Majority of the vote went against Lunana MP’s proposal despite the House carrying the discussion for a considerable amount of time.

The Finance Minister deliberated on the government’s awareness of the possible breaches regarding GST being unified at 7 percent for certain products which were previously under different taxation system at different rates.

Lyonchhen, during meet-the-press yesterday, after the NA session, expressed how GST could lubricate the economy considering its proven prowess, in theory, in many countries.

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