Offering a doma khamto is an expression of goodwill sometimes seen as soliciting favours or a socially acceptable bribe. Some in the doma import business have literally taken it too far.

 The tradition or the strange habit of chewing the nut and leaf smeared with lime, unfortunately, has become the means to evade tax and bribery. Both doma and paney are imported in huge quantities even if they are grown in the country. The increasing import has resulted in revenue leakages as it gave businessmen the leeway to evade tax.

A look at the statistics indicates how importers had been benefiting from the zero tax levied on import of paney, the so-called modus operandi to evade tax in collusion with custom officials. Import of paney has increased significantly in just one year. In 2020, according to the Bhutan Trade Statistics (BTS), Bhutan imported about Nu 101 million worth of betel leaves. This shot up to more than Nu 129M in 2021. Import, going by the BTS, increased by more than Nu 28M. That is a lot of leaves to chew in a pandemic year punctuated with lockdowns.

If importers are declaring the nut as leaves, they save the 20 percent sales tax imposed on the nut. Import of doma in the same period increased by about Nu 6.68M. Those chewing doma would know how many leaves are needed to go with the doma. Undervaluing the taxed item and overvaluing the non-taxable item not only resulted in revenue leakage but enabled importers from not having to resort to fraudulent payment practices as they paid through the formal payment channel, Real Time Gross Settlement.

 Playing with import items to evade tax or for other illegal practices is not new in the import business. Not long ago, we imported thousands of tonnes of rice in a few weeks or corrugated zinc sheets when the country was going through a Rupee crisis. These were the same tricks – if for a different reason. 

The anti-graft commission intervened this time when they, together with the police, intercepted vehicles carrying under or overvalued doma and paney. This, many say, is just the tip of the tall doma shing. What is more worrying is officials getting lured by bribes. 

As an import-dependent country, everything from salt to vehicles to electronics and heavy machinery is imported. For economic, environmental and political reasons, many goods, including essentials are not taxed or taxed less to let the benefit trickle down to common people. Taking advantage of taxation policies by tax officials and importers cannot be tolerated. 

So it is with many other goods. Many Bhutanese complain about the quality of goods supplied by traders and suppliers because the goods are manipulated to increase profits. Many in the import business make profits from evading tax whether through undervaluing or non-declaration, using their network. Those following rules sincerely have no room or a chance to grow in the import business or any business dependent on import.

A corporate employee who joined the private sector summed up what has to be done to survive. Without learning the “tricks of the trade,” he said, no one can survive. The tricks, unfortunately, are all at the cost of the government or the people.

ACC had done a good job this time. But those trying to outwit authorities have many tricks up their sleeves. They may be thinking of another item to outsmart authorities already.