Blamed on the cooling of the economy due to a number of contributing factors

Exchequer: The national revenue saw an increase of 10.2 percent in the last fiscal year recording a net collection of Nu 23.24 billion.

The growth in revenue, however, fell short of the average growth of the last four years, which stood at 10.5 percent.

The stunting was attributed to the setback in the economy due to adverse balance of payment, government restrictions on selected imports, and prudent policies on domestic credits.

All these factors directly translated to a 16 percent decline in indirect tax revenue.  Indirect taxes constitute customs duty, sales tax, excise duty and green tax.

Except for customs duty levied on goods imported from third countries, which increased by Nu 7.3 million or 2.4 percent, all other forms of indirect taxes saw a slump of between 0.4 percent and 30 percent.

To make up for the loss, revenue from direct tax increased by 18.6 percent, amounting to Nu 11.1 billion, constituting about 48 percent of the total tax revenue.

Direct tax constitutes corporate, business and personal income taxes, service taxes and royalties.

Corporate income tax saw an increase of 26 percent over the previous year, as most corporate entities had performed well.  Druk Green Power corporation and Druk Holding and Investments contributed the highest tax of Nu 2.3 billion and Nu 1.6 billion respectively.

Increased contract work for the ongoing hydropower projects has led to a 5.5 percent increase of business income tax.  Revenue from personal income tax also rose by 15 percent.

While royalty from tourism increased from Nu 902 million to more than Nu 1 billion in the last fiscal year, royalties from hydropower shrunk by Nu 25 million.

The increase was attributed to an increase in the number of tourist arrivals, while the drop in hydropower royalty was due to the government providing all rural households with 100 units of free electricity, using up all its royalty power.

Meanwhile, the cost of attaining the social obligations through tax exemption also resulted in forgoing Nu 2.3 billion.

During the year, domestic revenue was able to finance 100 percent of the recurrent expenditure, as mandated by the Constitution and 36 percent of the capital expenditure.

Tshering Dorji