The summer session of Parliament begins on May 26

Parliament: When the summer session of Parliament begins this week, the government will be exactly two years away from completing its tenure. And tax reform is one of the election promises it wants to push through Parliament before leaving office.

The seventh session of the National Assembly, which will begin on May 26, will amend the income tax Act.

Finance minister Namgay Dorji did not reveal details on the proposed bill, saying it is confidential. “I can just say that the amendment proposal is on the agenda,” he said.

Nonetheless, the government is looking to revamp the entire taxation system for what it calls “revival of investor sentiment and promotion of economic growth”. Even as the proposed reform remains confidential, one of the changes is expected in the Personal Income Tax (PIT) bracket.

The National Council (NC) in 2014 recommended raising the Nu 100,000 lowest tax exemption limit to Nu 200,000. Subsequently, the assembly endorsed a resolution in its fourth session calling the government to review the Act.

If the ceiling is increased, the number of taxpayers falling into the tax bracket will be reduced, thus reducing revenue from PIT. However, the amendment would benefit Bhutan’s middle class income group, which has been hit the hardest by rising inflation.

Also during the session, Prime Minister Tshering Tobgay will present the State of the Nation, which will highlight the government’s achievements, priorities and policies, to a joint sitting.

Parliament will also re-deliberate the controversial Paro dzongkhag thromde boundary. The decision to this effect was taken after the people of Paro rejected the current boundary.

Hence, election in Paro dzongkhag thromde is likely to be delayed. The last Parliament session also decided to defer the election in the thromde and passed a resolution that the Speaker would accordingly issue instructions to the Election Commission of Bhutan (ECB).

The house will also deliberate on the Framework Agreement between Bhutan and the European Investment Bank (EIB). The NC last year rejected the agreement stating that the document is not in consonance with the country’s external commercial borrowing guidelines and that it could undermine Bhutan’s sovereignty.

One of the highlights of the session will be a presentation of the annual budget 2016-17 by finance minister Namgay Dorji.

Also on the agenda are the Jabmi (Amendment) bill and the Company bill.

The house will deliberate on the Customs bill. Enactment of a customs Act will lead to separation of the Customs portion from the Sales Tax, Customs and Excise Act 2000.

The legislation is part of the government’s commitment to reform and modernise customs administration. The proposed reform aims to provide focused attention and ensure consistency in legal provisions as well as application of the customs laws.

The house will deliberate on the Civil Aviation bill. The bill was introduced last year.

One of the contentious issues in the assembly will be the Bangladesh, Bhutan, India and Nepal motor vehicle agreement, which the opposition last year shot down. Despite resistance from the opposition and transport operators the government is bent on ratifying the agreement.

The house will also deliberate issues from dzongkhags and other sectors. Deputy Speaker Chimi Dorji said such issues should reach the assembly secretariat 48 hours before deliberation.

MB Subba