Removal of 5% voucher tax to be discussed in 3rd session of Parliament

The removal of 5% voucher tax will be discussed only in the third session of the parliament.

Finance minister Namgay Tshering said all the tax reforms and fiscal policy reforms will be presented in the third session.

The Member of Parliament (MP) from Nganglam constituency, Choida Jamtsho, questioned the finance minister on the government’s pledge of removing 5% voucher tax.

MP Choida Jamtsho said it has seven months after having had formed the government and people feel when the voucher tax will be exempted by the government. It was neither discussed in first session of the parliament nor will be discussed in the second session.

Finance minister Namgay Tshering, in response to the question, said the previous government reformed the tax policy and imposed 5% voucher tax in 2014. The reason for imposing the tax was to generate revenue for the country.

He mentioned that in the end of 2013, the Gross Domestic Product (GDP) was at 2.8% which had reached at the lowest. It was introduced to make strong tax base system and to increase domestic revenue though it doesn’t contribute much.

“The tax collected from voucher tax is Nu 193mn annually. There are around 450,000 B-mobile subscribers and around 230,000 T-cell subscribers in the country,” the Lyonpo said, adding that non-Bhutanese users of both B-mobile and T-cell constitute 10%. The tax exemption for them is around Nu 16mn to 17mn.

Lyonpo also mentioned that in the seven months period the government had discussed on the issue and from the day after forming the government, the finance ministry drafted the tax reforms and submitted to the cabinet on November 28 last year.

He said the cabinet directed that the government will discuss together on all the major tax reforms latest by the third session of the parliament.

“Since it is major tax reforms and fiscal policy, it needs to be conducive for everyone. The tax exemptions should be given to Bhutanese citizens and Bhutanese citizens should be benefiting out of it,” the minister said, adding that non-Bhutanese getting tax exemption is against the law.

He added that the government has also requested the telecommunication service providers to provide information on the number of subscribers.

Lyonpo Namgay Tshering clarified that since it is bringing major tax reforms with fiscal policy, it needs to be discussed thoroughly and it also needs to be seen how the revenue forgone will be replaced.

“We will remove the 5% voucher tax in third session of the parliament,” Lyonpo said.

The 5% voucher tax presently deducts Nu 5 on every Nu 100 recharge and Nu 2.5 on every Nu 50 recharge.

Dechen Dolkar from Thimphu