Voucher tax removed

Voucher tax removed

With 39 “yes” votes, the National Assembly endorsed the removal of five percent tax on prepaid and the proposed postpaid tax on January 30.

Removing of the prevailing five percent tax on prepaid voucher was one of the pledges of the government though it could not waive off 5% voucher tax in 120 days as pledged since it was a tax issue and the Parliament had to deliberate and pass it.

Bhutan Telecom has around 438,037 mobile subscribers and Tashi Info Comm Limited had around 267,640 mobile subscribers as of September 2018.

Finance Minister Lyonpo Namgay Tshering also shared about a survey which revealed that Bhutan Telecom and Tashi Cell had distributed around 720,000 pre-paid sim cards which is a large number for a population of around 700,000.

The former government People’s Democratic Party (PDP) had imposed the 5% voucher and it was implemented from October 2014. The 5% tax deducts Nu 5 on every Nu 100 voucher and Nu 2.5 on every Nu 50 voucher.

However with the removal of voucher tax the government will have to forgo around Nu 200mn in revenue annually.

“At this time of tax reform, it is critical to look beyond politics. Our focus is to streamline the system, because there are concerns expressed that it meant double taxation for the companies. On our part, we are also convinced that our people, especially those in rural areas, are burdened by the amount, which is not fair,” Prime Minister Dr Lotay Tshering wrote on his FaceBook page.

A civil servant said it is good that the government is giving more benefits to the public. “I guess they must have done their homework to recover from some other taxation,” he said.

Kinga Lhamo a businesswoman said although the deduction amount is just Nu 5 for every Nu 100 recharge  if you calculate it for every recharge then one can feel the pinch of the deduction. “I am happy with the removal of the voucher tax and especially for the low income group and villagers it will have an impact,” she added.

Another private businessman, Kinley based in Thimphu said instead of removing the 5% voucher tax, the government should review data charges and talk time charges, which is comparatively much higher in Bhutan than other countries. “As Bhutan embraces internet driven technology to provide public services and for businesses, it will be critical to make the Internet cheaper and easily accessible,” he said.

Chencho Dema from Thimphu