In the current situation, community antenna television (CATV) has transitioned to utility service rather than entertainment. Unlike other utility services such as water, electricity, internet and mobile services which are exempt from sales tax, cable TV remains subject to taxation. Moreover, the former government has already waived entertainment/sales taxes on movie tickets and telecommunications. On behalf of the CATV providers in the country, Members of Parliament (MP) submitted a request to the government to consider removing the sales tax on cable TV during the tax amendment.
In response to this request, the Ministry of Finance (MoF) said that sales tax on cable TV connections are minimal, amounting to approximately Nu 69 per connection. What is more important here, according to the Ministry, is that this tax does not impose any burden on the TV service providers. Rather, the levy is passed on to the subscribers eventually.
Additionally, when cable TV services were upgraded from analog to digital connections, the government supported the transition by providing exemptions on sales tax and customs duty for all essential equipments required for the digitalization. “Business entities should acknowledge the significant support extended by the government rather than solely focusing on seeking further tax exemptions and waivers,” said the finance minister.
The Ministry also informed that at present, there are no immediate plans to waive the sales tax on cable TV connections. However, small and medium-sized cable TV service providers operating in Dzongkhags outside the four major Thromdes may not be subject to taxes after the implementation of the Goods and Services Tax (GST) Act. The applicability of the GST on the cable service will depend on the turnover of the actual service providers. If the providers’ turnover meets the minimum threshold of Nu 5 Million, the GST will be applicable irrespective of the location of service recipients.
The Ministry, on behalf of the government reiterated that as of today, the 13th FYP outlay is Nu 512.28 Billion with a fiscal deficit of Nu 55.93 Billion. Public debt is expected to go up and the national debt as a percentage of gross domestic product (GDP) may also rise.
“As responsible elected public officials, we should look at our incoming revenue sources before we can accommodate any enhancements in payouts or reduction in taxes. During the 13th FYP, our objective is to raise the tax-to-GDP ratio to 15% which is still low by the standards of progressive countries,” the finance minister acknowledged.
The contribution of cable TV service providers to Bhutan’s GDP is not separately quantified in public sources but forms part of the broader telecommunications and information sector, which is a significant component of the nation’s services economy. As of 2024, Bhutan’s GDP is projected at USD 3.11 Billion, with growth influenced by advancements in digital infrastructure, including the transition from analog to digital cable television. This transition improves revenue transparency and service delivery, impacting economic contributions through better regulation and subscriber management.
In Bhutan, after using analog television for over 16 years, the digitization of cable television has been initiated since June, 2018 in consultation with local cable operators (LCOs) and other relevant stakeholders. The digitization was started with Thimphu and now most parts of the country have already moved towards digital, connecting 60 LCOs out of 93 to two Multi-Service Operators (MSOs).
Cable operators, particularly those offering bundled services such as internet and TV, play a role in enhancing connectivity and access to information, indirectly supporting sectors like education and small businesses. This integration into the digital economy underscores their growing economic relevance. For specific insights into the cable TV sector’s exact contribution, further detailed economic studies or reports would be necessary.
Tashi Namgyal from Thimphu
