The tax revenue from international trade and transactions contributed to 1.3% of the total revenue, last year
The tax revenue from international trade and transactions saw a decrease of 8.1% as compared to the previous FY 2020-2021 of Nu 0.555bn to that of Nu 0.509bn in the FY 2021-2022.
This is according to the tax revenue for the Fiscal Year (FY) 2021-2022 report. The tax revenue from international trade and transactions contributed to 1.3% of the total revenue composition.
The report states that the reduction of the customs duty (CD) rate, that is, tax revenue from international trade and transactions is mainly attributed to a flat rate of 10% as the cause of the drop in customs duty collection.
“The objective of the CD rationalization exercise was to streamline and rationalize the multiple CD rates to increase trader compliance, improve predictability and transparency for traders and reduce the discriminatory application of CD rates,” DRC stated.
The other tax includes the passenger service charge, duties, and royalty. The revenue collected under other taxes was Nu 4.41bn, a decrease of 8.9% contributing 11.3% of the total revenue.
Meanwhile, under the taxes on income, profits, and capital gains, the taxes mainly comprise Corporate Income Tax (CIT), Business Income Tax (BIT), and Personal Income Tax (PIT).
The CIT collection for the FY 2021-2022 was Nu 0.10bn followed by BIT with Nu 1.29bn and PIT with Nu 1.96bn.
The increase in Tax revenue from CIT, BIT, and PIT is mainly attributed to an increase in the prices of ferrosilicon in the markets, an increase in the declaration from the telecommunication companies followed by an increase in exports and imports declaration at checkpoints, an increase in the risk-based assessment and increase in rental income and increase in the number of PIT filers, amongst others.
Similarly, taxes on property comprises recurrent taxes on immovable property, contributing about Nu 8.38mn tax revenue followed by SEZ/Protected Area/Special Area with Nu 0.601mn and taxes on capital transactions with Nu 0.135bn.
While, taxes on goods and services comprise sales tax, excise duty, green tax, and taxes on the use of goods and on permission to use goods or perform activities. The revenue collected under sale tax was Nu 5.6bn followed by excise duty and green tax with a revenue collection of Nu 0.386bn and Nu 0.992bn.
According to the DRC, the royalty is collected under sustainable development fees, forest products, mines and minerals, hydropower, and other royalties. The royalty collected was Nu 4.38bn during the FY2 2021-2022, a decrease of 9% as compared to the previous FY 2020-2021.
Meanwhile, the tax revenue for the Fiscal Year (FY) 2021-2022 has increased by about Nu 5.18bn as compared to the tax revenue of about Nu 20.66bn in the FY 2020-2021, an increase of about Nu 5.18bn.
According to the Ministry of Finance (MoF), the tax revenue collected in the FY 2021-2022 was about Nu 25.84bn, an increase of 25.1% as compared to FY 2020-2021 of Nu 20.66bn contributing 66.2% to the total revenue.
Department of Revenue and Customs (DRC), stated that the tax revenue comprises four heads, namely, taxes on income, profits, and capital gain, followed by taxes on property, taxes on goods and services, and taxes on international trade and transactions and other taxes.
Similarly, under the taxes on income, profits, and capital gains, the revenue collected was Nu 13.32bn, an increase of 37.6% as compared to the previous FY, and Nu 0.144bn was collected under the taxes on property, an increase of 4% as compared to the previous FY 2019-2020 with the collection of Nu 0.138bn.
And the revenue collected under taxes on goods and services was Nu 7.45bn, an increase of 37% as compared to the previous FY. The composition of Taxes on Goods and Services was 19.1% of the total revenue collection.
The decrease is mainly attributed due to a decreased collection from mines and minerals royalty and a slightly decreased hydropower royalty by 54.3% and 1.9% respectively.
Meanwhile, the total net domestic revenue realized during the FY year 2021-2022 was about Nu 39.04bn representing 13.7% of the Gross Domestic Product (GDP), an increase of 8.9% as compared to the previous fiscal year 2020-2021 of about Nu. 35.85bn.
As compared to the previous FY 2020-2021, the overall tax revenue increased by 25.1 percent, 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, according to the National Revenue Report for the FY 2021-2022.
Sherab Dorji from Thimphu
