NC: Finance minister Namgay Dorji provided explanations on a number of issues like the Dzongkhag Development Grant (DDG) and budget allocation, among others, during the National Council’s (NC) question and answer session on June 14.
Pemagatshel NC member, Jigmi Rinzin said that the Gewog Development Grant (GDG) is understood as an additional Nu 2 million (M) on the normal budget. “But there is doubt if the government is not appropriating GDG by slashing budget from the planned activities,” Jigmi Rinzin said.
“Though the DDG is a good idea, it is doubtful if the grant is not appropriated by slashing budget from the planned activities too,” Jigmi Rinzin said, adding if a proper guideline is even being framed on how the grant must be used. “It is unclear whether the dzongkhag would use the budget independently or the central government would direct its usage.”
He also asked how the government is planning to make up on the revenue loss of Nu 484M because of the PIT slab revision. “Measures must be taken to ensure that the revenue is not affected when taxes are lowered,” he said.
Jigmi Rinzin added that the revenue loss could be recovered by increasing the PIT for income levels above Nu 250,000. “PIT can be raised progressively from 10-25 percent for income slabs higher than 250,000-1 million,” he said. “If the income is higher than Nu 1M, 30 percent could be levied to avoid revenue loss.”
Responding to Jigmi Rinzin, the finance minister Namgay Dorji said that similar doubts were expressed on GDG in the National Assembly. “GDG is additional to the proposed budget plans for the local government,” Lyonpo said.
According to the minister, the DDG is allocated to cover those activities which are left out because it wasn’t a priority when the plan was made. “The basis for the DDG is that Lyoncheon was appraised by the dzongkhags of activities getting left out since they were not a priority when the plan was made but have become priority now,” he said.
The minister added that Nu 5M of the Nu 7M DDG is from their proposed budget ceiling. “Remaining Nu 2M was given as additional fund if some activities could not be achieved with Nu 5M,” he said, adding that the dzongkhags can use the funds based on priority of their activities.
The ministry has also framed a guideline on the DDG. “Before the final budget release the guideline has been deliberated thoroughly and it’s almost ready,” Lyonpo said.
On increasing PIT for those earning Nu 250,000 or higher, the minister said that it could not be increased though it is the government’s objective to reduce the gap between the rich and the poor. He said that there are only 285 people with an annual income level of Nu 15M or higher.
“Even if we increase the PIT for these lot only Nu 40M can be obtained. Hence we decided not to raise with an objective to facilitate private sector growth,” Lyonpo said.
Meanwhile, Trongsa NC member Tharchin said that Nu 1.5M is too little for the Anti-Corruption Commission (ACC), which proposed for Nu 3M.
As per ACC’s annual report, social accountability tools have been implemented only in 19 gewogs. Awareness programmes on social accountability has also covered only 78 gewogs of the 205 gewogs.
“Nu 1.5M isn’t enough to complete these programmes in the remaining 205 gewogs,” Tharchin said. He asked if Nu 3M could be released instead of Nu 1.5M.
But the minister said that the budget has already been appropriated. “Since the budget appropriation is already completed no alterations can be done now,” he said.
Tharchin also questioned the government on allocating Nu 300M for procurement of vehicles. “If I am to remind, the government had earlier prioritised on doing away with existing pool vehicles,” he said.
In light of this, Tharchin asked the minister to explain the progress on doing away with pool vehicles. He also asked if the government was now planning to buy new vehicles.
The minister said that the government did not endorse doing away with pool vehicles. “The government rather planned to auction those vehicles older than 15 years,” Lyonpo said.
“Much of the allocated budget is also for the procurement of cars for drangpons,” the minister said, adding that the government is also planning to get rid of 290 pool vehicles older than 15 years. “The replacement for these vehicles will be given as per the respective sectors requirements,” the minister said.