Vehicle taxation will not reduce but control imports: Finance minister

Vehicle taxation will not reduce but control imports: Finance minister

Quizzed on the recent tax raise on vehicle imports, finance minister, Namgay Dorji said that though the measure might not reduce vehicle import, it is expected that vehicle import will at least be controlled.

“The latest decision of the government is meant to neutralize and restrict vehicle import. Though imports might increase, the measure will control imports,” said Lyonpo.

He said in the next six months if vehicle imports number 100 and nothing is done, the figure could double.

“However, if we impose  tax measures, imports might be controlled.”

Lyonpo said that he does not deny the fact that vehicles have become a necessity now in Thimphu and elsewhere too in the face of poor public transportation. He also said that the government is doing everything possible to improve public transportation network.

“Recently, an additional 22 public transport buses were imported,” said Lyonpo.

Talking about alternatives, the finance minister said the government would explore options such as categorizing which vehicles to tax or not.

Based on vehicle utility, the government might levy certain percentage of tax. Lyonpo stated that this would be the only way to balance vehicle import.

“Just because vehicles have become a necessity for people does not mean we can import unlimited numbers at the cost of major rupee outflow and other basic necessities,” said Lyonpo.

Bank officials said that since the government has taken the decision, little can be done and it would be too early to talk about the outcome of the new taxation.

Meanwhile, many are perplexed about whether they should buy a car or not.

A 26-year-old, seeking anonymity said that if the whole purpose of the new vehicle taxation is to control vehicle import, the government should have taken the initiative a long time back. “Why now? Rich people will go on buying cars while it is people like us who will be affected.”

A private employee suggested that if the government really wanted to monitor vehicle import, it should come up with a new rule of one car per household. “There are families where the father owns a car, mother her own and children their own. Instead of looking into such matters, the government keeps on coming up with taxation,” she said.

Tandin Dorji, another private employee said that with poor public transportation, he thought owning a car would be better and he decided to apply for a loan but with the new vehicle tax notification his dream would remain unfulfilled.

As of July 31 this year, there are 46,024 vehicles in Thimphu, alone and 31,379 in Phuentsholing.

Chencho Dema from  Thimphu