Finance Minister Namgay Tshering tabled the Fiscal Incentives (amendment) Bill 2022 in the National Assembly yesterday.
The Bill seeks to repeal Section 56(1) of the Fiscal Incentives Act 2021, which states that manufacturing industries are eligible to a concessionary customs duty (CD) rate of 3 percent on the import of permissible raw materials and primary packaging materials.
The finance minister reasoned that the same was covered under Section 51 of the Act, which states: “For the manufacturing sector, there shall be sales tax (ST) and CD exemptions on plant and machinery, raw material, packaging material and proprietary raw material (concentrate or formula).”
However, Opposition members criticised the government, saying that it had proposed such amendments to the Fiscal Incentives Act repeatedly.
The Bill was last amended in the 2021 winter session.
Opposition Leader Dorji Wangdi said that the government lacked adequate homework and stakeholder consultations on the Bill. “The repeated discussions on the same Bill in Parliament would consume time and resources,” he said.
Bartsham Shongphu MP Passang Dorji (PhD) also said that the repeated amendments to the Fiscal Incentives Act indicated lack of consultations with the Royal Monetary Authority (RMA).
“We are spending a lot of time on the Bill,” he said.
The finance minister, however, said that the ministry had held rounds of consultations with the central bank and other stakeholders.
Lyonpo Namgay Tshering said that it was the government’s prerogative to table money Bills and that it was the Parliament that passed the Bills.
He reminded the Opposition members about the first constitutional case, in which the government had increased import taxes on vehicles without Parliament’s approval.
The government has not introduced new exemptions in the fiscal incentives Bill.