The Bhutanese Leading the way.
During the Mid Term Review of the 13 FYP, Finance Secretary Leki Wangmo stated that after the Department of Revenue and Customs (DRC) shifted to value-based taxation on property there has been a significant increase in tax revenue from Nu 55 million to more than Nu 600 million after the shift.
The Secretary also said that 90% of Bhutanese citizens have a tax burden of Nu 1,000 or less.
The review also highlighted how tax revenue is distributed across properties. 53% of the tax revenue is generated from 7% of the properties. This shows that a small proportion of property holdings contributes to more than half of the total tax collection. The average rural tax is Nu 372, which reflects the relatively low tax levels in rural areas compared to other segments.
At the higher end of the distribution, the top 1.1% of the properties generate 47% of the tax revenue. This indicates a strong concentration of tax contribution among a very small segment of property owners. Thimphu alone generates 41% of the tax revenue, showing the dominance of the capital in overall tax generation.
Value-based property taxation is a system where property taxes are calculated based on a percentage of the assessed market value of land and buildings. The assessment is linked to market value rather than being determined by fixed rates or land area. Under this system, taxation is connected to the value of the property being assessed.
She said earlier land in Gasa of Thimphu attracted the same tax but it is now valuation based.
