Tax payers in the income slab ‘Nu 300,001 to 400,000’ has contributed more in the IY 2022 compared to 2021
As of March 20, 2023, 60,237 individuals filed their personal income tax (PIT) with a total amount of Nu.1749.697mn (self declared) collected. This is an increase by Nu 248.503mn as compared to the income year (IY) 2021, where Nu 1501.194mn was collected.
However, the year saw a decline in the number of PIT payers at the highest rungs, or those earning the maximum. Records also show that despite an increase in the amount of PIT filed, there is a decrease in the number of people filing PIT.
The maximum numbers of people who have registered but did not pay any PIT are in the income slab below Nu 300,000.00 with a total of 24791 people in this slab. In the IY 2021, the number in this group was 24287.
The highest amount collected was from people in the income slab of Nu.1, 500,000.00 and above. The IY 2022 saw 659 people in this group, who paid a total of Nu 859.103mn. While this is an increase from the IY 2021, where Nu 562.207mn was collected from this group, the number of people in this group in the IY 2021 was 734 apposed to 659 of IY 2022.
The second highest collected was from those in the income slab of Nu 400,001.00 to Nu 650,000.00, where 10,771 people paid a total of Nu 320.388mn as PIT. However, PIT collected from those in this slap has declined compared to the previous year. In the IY 2021, there were 16,651 people in this group who paid a total of Nu 402.907mn as PIT.
Following the above are those in the income slab of Nu 650,001.00 to 1,000,000.00. In the IY 2022 there were 3,552 people within this group who paid a total of Nu 253.370mn as PIT. In 2021, there were 3,641 people in this category who paid a total of Nu 263.391mn as PIT.
Meanwhile, 19,415 people in the income slab of Nu 300,000.00 to Nu 400,000.00 paid Nu 140.960mn as PIT this year. There has been an increase in this bracket as 2021 saw only 13,964 people of this group, who paid Nu 70.95mn as PIT.
PIT from individuals in the income slab of Nu 1,000,001.00 to Nu 1,500,000.00 has also decreased. 1050 people in this group paid a total of Nu 175.822mn in the 2022 IY. In 2021, there were 1217 people in this slab who in total paid Nu 201.734mn.
People in the Nu 300,001 to 400,000.00 income slabs have to pay 10% as PIT, while those in the Nu 400,001 to 650,000 bracket pay 15%. 20 % is paid by those whose incomes are in between Nu 650,001 to 1000,000 and 25 % by those in the Nu 1,000,001 to 1,500,000 brackets.
The highest payers are those in the bracket that exceed Nu 1,500,001.00 who pay 30 % as PIT. In addition to PIT, a surcharge at the rate of 10% is also levied on Personal Income Tax, if the annual Personal Income Tax is equal to or more than Nu 1,000,000.
According to DRC, the increase in PIT was mainly due to increase in rental income and increase in the number of PIT filers.
“The increase in rental income was due to vigorous rental surveys conducted by the tax auditors, and due to the interest payment support provided by the government where it is not tax deductible under PIT,” said an official from the Finance Ministry.
Meanwhile, the number of tax payer in the four income slab, namely; Nu 400,001 to 650,000, Nu 650,001 to 1000,000, 1, 000,001 to 1, 500,000 and Nu 1,500,000 and above has decreased in the IY 2022 as compared to IY 2021.
Meanwhile, the total net domestic revenue realized during the fiscal year 2021-2022 was Nu 39.043mn, representing 13.7% of GDP.
According to the Royal Monetary Authority’s (RMA) annual report 2021-2022, the net domestic revenue increased by 8.9% as compared to the previous fiscal year 2020-2021 of Nu 35.855mn.
Meanwhile, as compared to the previous fiscal year 2020-2021, the overall tax revenue increased by 25.1% and under non-tax revenue the current revenue from government agencies increased by 15% and capital revenue by four times more than the previous collection, thereby increasing the overall net revenue.
Sherab Dorji from Thimpu