The new expiry date of the existing fiscal incentives (FI), which otherwise expire on December 31 this year, has been reversed to the one proposed by the government.
The finance minister had proposed in the National Assembly to extend FI Act 2017 to December 31, 2021, but the House recommended extending the expiry date until June 30, 2022.
The National Assembly adopted the FI Bill 2020 with 43 “Yes” votes out of 45 members voting on the Bill. Two abstained.
However, Speaker Wangchuk Namgyel after the voting realised that there were a total of 46 members present in the House, which means that one of the members neither voted Yes or No, nor pressed the “Abstain” button.
“It could mean that the member was present in the House only physically (at the time of voting). All the members present in the House should vote Yes or No, or abstain,” the Speaker said.
The Bill will be submitted to the Druk Gyalpo for Royal Assent.
Member in-charge of the Fiscal Incentives Bill, Finance Minister Namgay Tshering, moved the motion for adoption of the Bill after members accepted the National Council’s recommendation.
“There should be no problem with the dates recommended by the National Council. All the beneficiaries will continue to receive the existing incentives without any change,” he said.
The finance minister said that new fiscal incentives would be proposed as soon as possible. He said that it was not possible for the government to propose a new fiscal incentives Bill at the moment because of the uncertain Covid-19-induced economic situation.
The National Council did not add any new proposals expect the dates. It reasoned that extending the FI Act 2017 could create inconvenience in implementation of the Act, saying that the expiry date should be aligned with the income year, not the fiscal year.
The NC also reasoned the Goods and Service Tax (GST) Act will come into effect from July 1, 2021.
A total of 844 businesses benefited from tax exemptions and other fiscal incentives under FI Act 2017, according to the finance ministry.
The government has forgone Nu 6.5 billion (B) in taxes under the FI Act 2017. In return, the government received a total of Nu 5.3B as taxes from the business establishments that availed fiscal incentives under the same Act.