Thukten Zangpo
The Association of Bhutanese Industries (ABI) has appealed to the Ministry of Energy and Natural Resources (MoENR) to exempt the import and export fees and service charges for charcoal and non-wood forest produce (bamboo chips).
The ABI appealed to the MoENR on April 24 after the Department of Forests and Park Services under the MoENR imposed these fees and service charges on import of charcoal and bamboo chips.
These fees are stipulated in the Forest and Nature Conservation Rules and Regulations (FNCRR) 2023.
The FNCRR 2023 allows the ministry to impose fees for public services and other administrative tasks, with periodic revisions. The new fees are set at Nu 20 per metric tonne (MT) for charcoal and Nu 5 per kilogramme for non-wood forest produce (bamboo chips).
ABI’s General Secretary Pema Namgyel Ghaley said that the charcoal and bamboo chips are essential raw materials for the manufacturing industries, especially the production of ferroalloys. These materials are essential for reducing oxide and enhancing porosity in production processes.
“The imposition of import fees would have huge implications on the industries, significantly hindering their ability to operate efficiently and impacting their competitiveness in the market,” he said.
The General Secretary also pointed out that the new fees contradict the Fiscal Incentives Act 2021, which provides exemptions from sales tax and customs duties for raw materials used in manufacturing. “Clause 51 of the Fiscal Incentives Act 2021 clearly provides exemptions on sales tax and customs duties for importation of raw materials.”
According to clause 51 of the Fiscal Incentives Act 2021, the manufacturing sector is exempt from the sales tax and customs duties on plant and machinery, raw material, packaging material, and proprietary raw material (concentrate or formula).
The ABI also approached the Ministry of Industry, Commerce, and Employment (MoICE), stating that additional fees burden industries and could hinder their market competitiveness. This could also impact industrialisation goals to revive the economy and meet the manufacturing sector’s contribution to GDP outlined in the 13th Plan.
The MoICE Secretary has written to the MoENR, seeking a review of the import fees and a temporary exemption for manufacturers until they achieve sustainability in their production.
MoENR Secretary Karma Tshering said that the ministry is reviewing the exemptions of the import fees.
However, he said that the ministry revised interim rates for import fee for bamboo chips, from Nu 5 per kilogramme to Nu 20 per MT, which is highly favorable to industries. Additionally, the export fee for briquettes was revised to Nu 40 per MT at the end of July and will apply until the rules are amended.
“All chief forestry officers were informed to take actions as per the new instructions,” Karma Tshering said.
Bhutan imported 19,998MT of bamboo chips and 107, 247.54MT of charcoal in 2023.