Vehicle ownership transfer not seriously implemented, RSTA loses huge amount in fees

A Prado of 2016 model would costs around Nu 4.8m and the tax for ownership transfer would be around Nu 48,000

The Road Safety and Transport Authority (RSTA) is finding it increasingly challenging to track down the transfer of vehicle ownership while selling and buying of vehicles.

It is in fact the main issue for the authority as most people do not report to the authority after they sell their vehicle and many people do not transfer the vehicle ownership after selling and buying vehicles in the country. 

According to records with the RSTA, the number of people who report to authority on transfer of ownership is not high, though the selling and buying of second hand vehicle in the country is increasing every year.

According to the RSTA Act 1999, a person selling a vehicle should report to the authority within 15 days of sale and transfer the ownership.

While transferring the ownership buyers should be pay a movable property transfer tax of 5% to 10% of the total vehicle cost. However, the tax also depends on the depreciation value.

Vehicle model from 2010 to 2020 will be 10% of the total vehicle cost and for models from 2010 and earlier will be 5% of the total vehicle cost.

For example, if it is a Prado of 2016 model, it costs around Nu 4.8m and the tax for ownership transfer would be around Nu 48,000.

The Planning Officer of the RSTA, Leki Choda, said a maximum number of people after selling and buying vehicles do not report to the authority.

โ€œIt is fault of the sellers who are owners of the vehicle. If anything happens to the vehicle the responsibility will fall on the vehicle owner,โ€ said Leki Choda.

He said the reason for not reporting to the authority after selling the vehicles could be because of the very high cost on movable property transfer taxes.

There are incidences of high outstanding debts on vehicle renewal too.

Leki Choda said there used to be a high penalty charge of Nu 100 per day.

โ€œWe have revised the penalty at Nu 10 per day; that has encouraged the people to renew their vehicle ownership and it has reduced outstanding debts.โ€

He added RSTA does not have the capacity to track down vehicles which have not been registered.

He added that another alternative was people who did not renew their vehicle for two consecutive years would find their vehicle registration automatically cancelled.

RSTA is in the process of discussing whether the obligations should be of the sellers or to the buyers or to share the cost between the sellers and buyers. Because the present regulations state that the obligation is for the seller for ownership transfer.

The authority is also looking into the possibility of making lump sum payment on transfer of ownership tax to encourage people for coming forward for ownership chnage.

However, there are some people who come forward to transfer the vehicle ownership.

In 2018, 996 in Thimphu, 393 in Phuentsholing, 189 in Geleph, 100 in Samdrup Jongkhar and 78 in Mongar transferred their vehicle ownership paying taxes.

Dechen Dolkar from Thimphu