NC says the government must establish the legality of the tax incentives given until May 8, 2017

The government’s outright rejection of the allegations against it violating the Constitution by granting the Fiscal Incentives 2016 without the parliament’s approval has irked the Opposition, the National Council and Druk Nyamrup Tshogpa (DNT).

Prime Minister Tshering Tobgay, in a live interview on BBS on June 27, and at the Meet the Press on June 23, dismissed the accusations as unsubstantiated. The Prime Minister said that the accusations of the Opposition and DNT were politically motivated.

The National Council, the Opposition and DNT have hit back at the Prime Minister over his statement saying that the Prime Minister’s statement undermined the principle of democracy.

Panbang MP Dorji Wangdi said the Prime Minister’s statement against the Opposition was uncalled for. “The PM’s singling out of some business entities is highly misleading and baffling,” he said.

Questioning the timing of the declaration of the Fiscal Incentives 2013, the Prime Minister said the previous government dissolved just three days after announcing the fiscal incentives.

The Prime Minister in the BBS interview had said that Le Meridien hotel benefited Nu 76.9 million within the period of two years and eight months from the fiscal incentives. He said the hotel belongs to the daughter of North Thimphu MP Yeshey Zimba, who was a minister in the former government.

“It is up to the Anti-Corruption Commission to see if there was any policy corruption,” the Prime Minister had said.

However, MP Dorji Wangdi said that a government could grant fiscal incentives even on the last day of the tenure. “Doesn’t a government have the right and duty to function till the last hour of its legal tenure?” he asked.

Dorji Wangdi said that despite being the second government, PDP has “not accomplished” anything. The introduction of fiscal incentives and economic development policy were the achievements of the former government.

“We are extremely proud to have pioneered the fiscal incentives and economic development policies,” he said. According to him, most of the fiscal incentives the present government has given are the continuation of the past fiscal incentives.

In the BBS interview, Prime Minister challenged DNT to take the government to court and prove that it has violated the Constitution. “For DNT to make such comments off the cuff is not enough,” he said, adding that DNT had made comments without proper knowledge of the prevailing laws.

DNT had earlier called for resignation of the Prime Minister and the Finance Minister on the grounds that the government had breached the Constitution by granting fiscal incentives.

DNT president Dr Tandi Dorji said the Prime Minister’s attempt to dismiss the arguments of other political parties and the National Council does not bode well for Bhutanese democracy and its principle.

“Showing anger publicly by a prime minister is inappropriate,” he said. He said the Prime Minister made “condescending remarks” not only about DNT but also the Opposition, and the Council to find excuses.

He said that the Prime Minister’s reaction demonstrated that the government was not willing to debate on the issue. “We are saddened with the way our PM dismissed the democratic views of the Opposition, the Council and DNT, with total disregard and arrogance,” he said.

Referring to DNT’s earlier press release, the Prime Minister said on BBS interview: “They (DNT) have called me a two-faced politician. I have a big face but I don’t see two faces there.”

Prime Minister Tshering Tobgay said that in defending the Constitution, the former Opposition had never stated the fiscal incentives granted by the former government were illegal.

The former government had granted fiscal incentives thrice – twice in 2010 and once in 2013 – without the parliament’s approval. The present government gave continuity to the fiscal incentives granted in 2013 without the parliament’s approval.

The Prime Minister said, “Our stand then and now is the same. The only difference now is having learned and known what the previous government did just three days before they resigned. We think it’s a good idea to take the powers related to fiscal incentives away from the government.”


National Council

The Prime Minister had criticised the Council’s decision to reject the Fiscal Incentives Bill 2017. Deputy Chairperson Tshering Dorji had said that the government should collect the tax forgone without the parliament’s approval.

The Prime Minister said the Deputy Chairperson’s comments showed lack of understanding of the law.

In an email interview, the Deputy Chairperson said: “First of all, I was really shocked with the way Hon’ble Prime Minister interpreted my comments, which I made in response to a question that was asked by a media house along the sidelines of the post-session press conference of the Council. I was doubly shocked with the way Hon’ble Prime Minister has questioned the working of the House and singled me out by directly questioning my experience and knowledge as a law maker.”

Tshering Dorji clarified that he had spoken as the spokesperson of the Council without any political, personal or malicious intent or for any publicity stunt. “I did not see the reason for such overreaction from the PM.”

The Prime Minister had said that the Deputy Chairperson’s comments were his personal views, and necessarily the Council’s.

The Deputy Chairperson said that he still stands by the statement he made at the post-session press conference. He said that in fact, whatever he had said was nothing different from what the chairperson of the National Assembly’s legislative committee, MP Ritu Raj Chhetri, has said: the responsibility to recover the taxes falls on the government. (Kuensel, June 23, 2017). “I only added that the Council hopes that the government will uphold the rule of law.”

After the Prime Minister’s statement on BBS, he said the ambiguity became even more pronounced. “The Council recognizes the supremacy of the National Assembly over money bills. There has been no argument about it. If, as argued by Hon’ble Prime Minister, the supreme court’s judgment does give the executive the right to grant tax incentives without the approval of Parliament, it calls into question the very decision to table the Fiscal Incentive as a bill in the Assembly.”

Tshering Dorji said that on the other hand, the Council understands that the objective for the same was to seek approval and therefore, legitimacy from Parliament. The Fiscal Incentive Bill 2017 was passed by the National Assembly as a money bill,  granting tax incentives from May 8, 2017 and not from January 1, 2016 as initially proposed by the government, he said.

Accordingly, he said that for the period not granted in the bill, it would be logical to infer that the incentives have not been approved by an Act of Parliament.

“The argument by the PM that the tax incentives granted by the government until May 8, 2017 is derived from the Supreme Court’s interpretation, and further the tax incentives from here on shall be approved by the Parliament in the form of money bill, implies how conveniently, the Supreme Court’s interpretation and Parliament’s approval, of fiscal incentive Bills is used as two sources of legitimizing its position,” he said.

He added that the National Council continues to call upon the government to uphold the rule of law without causing inconvenience to the people.

Prime Minister in the BBS interview said that the fiscal incentives declared by the former government benefited 94 hotels to a tune of Nu 186 million in a span of two years and eight months.

The Prime Minister said that “it could be coincidental” that (the daughter of a minister in the former government benefited from the fiscal incentives granted by the former government). “But the coincidence is a bit too stark,” he added.

He added that he was revealing the figures since the Opposition wanted the government to collect the taxes forgone accepting them as illegal.

Dorji Wangdi said that considering the recommendations of relevant agencies like the Tourism Council of Bhutan and Hotel Association of Bhutan, the previous government revised the first fiscal incentives twice. The aim of revising the fiscal incentives was to ensure that all business houses in a certain sector got equal and blanket treatment as per the incentives prescribed for that particular sector.

MP Yeshey Zimba was not available for comment.

MB Subba