The government has utilized around Nu 200mn from the total Nu 610mn for the project as of now
The lack of experienced staff for the development of the tax system at the Thimphu TechPark Limited (TTPL) and the inability of subject matter experts from the Department of Revenue and Customs (DRC) to provide full-time participation have delayed the development of the Good and Services Tax (GST) software.
According to the Ministry of Finance (MoF), the DRC office has attached four officials for the GST project. The attachment of these officials was in line with the DRC’s expectations of COTS.
However, the allocation of officials has not been sufficient to meet the requirement.
“The engagement of DRC subject matter experts in the day-to-day work in the DRC office have made them unable to provide full-time participation as the project team,” an official said.
For the GST project, the official said that the team needs some additional DRC subject matter experts; if not the implementation of the GST software may have to be extended further.
According to the MoF, there are differing expectations due to the DRC requesting and expecting a Commercial Off The Shelf (COTS) model approach, where TTPL employed a framework model requiring bespoke functional development.
Meanwhile, the government has utilized around Nu 200mn out of the Nu 610mn to date on the Bhutan Integrated Taxation System (BITS), including software to support the introduction of the GST in the country.
Finance Minister Namgay Tshering said the software is still under development at the TTPL with technical experts from Armenia.
He added that additional DRC officials will be sent to the GST project if needed.
“BITS will support the GST from next year but development will continue,” he said, adding that the development of all the Minimum Viable Product (MVP) covering return filing, accounting, and payment will be completed by March next year.
Lyonpo shared that the BITS and GST will be one important component in addressing tax leakages. Through the implementation of the GST, it is expected to reduce exemptions, broaden the tax base on consumption and minimize tax leakages.
“The GST legislation contains measures to help deter, detect and respond to tax avoidance. These measures will, over time, be fully implemented into BITS,” he added.
Meanwhile, the government has proposed to defer the implementation of the GST Act 2020 to July 1, 2022.
Lyonpo also shared that the income tax registration launched last month and the GST software are still in progress and all the MVP covering returning filing, accounting and payment will be updated on December 13 this year.
While presenting the GST (Amendment) Bill 2021 in the National Assembly this week, Finance Minister Namgay Tshering said that the Bhutan Integrated Taxation System (BITS) or the GST software were being developed and they are expecting for implementation by next year.
In addition, the GST software comprises a registration platform and a payment and refund system.
According to the official, 99% of the development of the registration platform has been completed, while work for the payment and refund system is in progress.
Kinley Yonten from Thimphu