Bankrolling City Hall

With an elected thrompon, thromdes have never been scrutinised as much as they are today.  There are expectations for development and change.  Voters are quick to point out that, with or without thrompons, change is slow.

A lot will depend on the elected leader of a thromde.  From making policies to implementing and monitoring them, thrompons could bring changes.  But a lot will depend on what is in their coffers.  Developing or maintaining a thromde is expensive and they need budget.

It is in this context that the move to revise urban taxes should be welcomed.  There is some secrecy in discussing the proposal, although all relevant agencies, and even the prime minister is involved.  A government or, for that matter, an elected leader that proposes tax revision becomes unpopular instantly.  But we are accepting defeat if we lean towards making only populist decision.

There is a huge demand from the voters.  They need better roads, reliable water supply, sewage system, parking spaces, parks, playgrounds; the list goes on.  These amenities can be developed only when a municipality has enough cash with them.

Our taxation policy does not allow thromdes to be financially independent.  We have an elected thrompon at the local government level, but he has to depend on the government for budget.  Our expectations are unreasonable, considering how much we contribute for the facilities we are provided.  It is safe to surmise that our urban tax is one of the lowest, if not the lowest.  Donors have already started to point out that Bhutanese are too dependent on the government.

It would be unrealistic to solely depend on tax income to run a thromde.  From the expenditure, we saw that it runs into hundreds of millions of ngultrums.  But a revision in urban tax would improve the revenue of the thromde.  Land and property owners in Class A thromdes would not feel the pinch from a slight revision on land and property tax.  It should be looked as a contribution to building a better and more beautiful town or city.

It is also high time thromdes start charging service tax.  Taking care of the waste we generate is costing the thromde millions.  A nominal fee for waste collected from the doorstep makes sense.  We don’t envisage people coming on the streets to protest a charge of Nu 100 a week for waste collection.

The beauty of paying tax, meanwhile, is that the thromde becomes answerable to taxpayers and voters.  Taxpayers could question where their money is spent if services are not improved.  That way the thromde will be forced to improve service delivery.

While a possibility of a revision is worked on, it is also an appropriate time to see if some form of tax revenues collected from a thromde could go straight to the thromdes.  What about all or a certain percentage of business income tax, collected from businesses in a thromde, going to the thromde accounts?  These are options we could consider as we discuss the issue.

 

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