NA finalises SDF at Nu 1,200 per person per day

Tourism Levy Bill ignites hope of opening additional entry points 

MB Subba

Tourists from the region visiting Bhutan would have to pay Nu 1,200 per night per person as sustainable development fee (SDF), according to the Tourism Levy and Exemption Bill of Bhutan 2020.

The National Assembly (NA) decided this yesterday following the recommendations of the environment and climate change committee, as a new proposal in the Bill.

However, amid concerns on whether the SDF may be a bit high, the Bill seeks to exempt regional tourists visiting 11 dzongkhags from paying the SDF. The dzongkhags are Lhuentse, Mongar, Trashigang, Trashiyangtse, Pemagatshel, Samdrupjonkhar, Tsirang, Dagana, Zhemgang, Trongsa and Sarpang.

Six eastern dzongkhags already enjoy the exemption of SDF of USD 65 on international tourists. The Bill extends the same exemption to Tsirang, Dagana, Zhemgang, Trongsa and Sarpang.

The Bill is expected to be implemented from July this year.

The exemption is to improve tourism growth in dzongkhags that do not receive many tourists. However, the exemption list does not feature Samtse. 

Economic Affairs Minister Loknath Sharma expressed his regrets on the exclusion of Samtse. 

“Samtse has potential in tourism development but it is one of the dzongkhags that do not receive tourists. It was unfortunate that my dzongkhag is not included in the exemption list,” he said.

Chairman of the environment and climate change committee, MP Gyem Dorji, said more studies needed to be carried out to include Samtse. “The exemption list will be updated from time to time,” he said.

Some members said the impact of the exemption of USD 65 for international tourists to the six eastern dzongkhags was yet to be seen. Suggestions for improvement of infrastructure such as roads were made.

The exemption of levy will expire on December 31, 2024, according to the Bill. It will be up to the next government to decide on whether or not the exemption will be continued.

 

Entry points

The levy exemption for the 11 dzongkhags has given some hope about the government’s commitment on opening additional entry and exit gates for regional tourists in line with a resolution of the first sitting of this parliament.

Prime Minister Lotay Tshering said that when the implementation of the Act begins in July or August, border gates for entry of tourists would be opened in Gelephu and Samdrupjongkhar. He said regional tourists were a major source of income for the country and people.

The Bill does not differentiate between children and adults. But it was clarified that children under five years will be exempted from SDF, while those between six years and 12 years will be levied 50 percent.

The House also weighed possible impacts on the hotel business and Bhutan’s unique image as a champion in environment and cultural preservation.

The Bill also re-phrased “high value, low impact” tourism as “high value, low volume.” It was reasoned that the high volume posed a challenged in maintaining low impact of tourism.

Phuentshogpelri MP of Samtse, Ganesh Ghimiray, asked how the government would go about should SDF affect hoteliers. “Imposition of SDF is a good idea, but it poses risks to our hoteliers,” he said.

Panbang MP Dorji Wangdi said that the SDF should be per person per trip for three years instead per person per day. He reasoned that hoteliers’ interests should be considered.

However, home minister Dasho Sherub Gyeltshen supported raising the SDF up to USD 30 as a measure to control overcrowding. “We should preserve the pristine environment and culture in the country’s interests,” he said.

Foreign Minister and chairman of Tourism Council of Bhutan (TCB), Dr Tandi Dorji, said that it was too early to predict the impact of the SDF. But he added that the government would consider fiscal incentives if the new policy affects hoteliers.

Gangzur Minjey MP Kinga Penjor said that regional tourists coming in families should be offered packages to minimise the impact on local businesses that are dependent on tourism. He said that the SDF of Nu 1,200 on each person on a daily basis could be expensive for regional tourists.

If a family of five stays for six days, the family would pay Nu 36,000 as SDF and given the high numbers of regional tourists, the country is expected to earn hundreds of millions annually. Bhutan received 202,290 regional tourists in 2018, according to official records. Regional tourists are ones that come from India, Bangladesh and the Maldives. 

However, Menbi Tsenkar MP Choki Gyeltshen said that SDF alone would not improve tourism development and emphasis should be given to infrastructure development as well.

Dr Tandi Dorji said regional airports would be improved to encourage tourists. “Gradually, there would be one policy for both regional and international tourists.”

Prime Minister Dr Lotay Tshering said that the proposed SDF was the most appropriate the government could come up with.

The Bill identifies TCB as the competent authority to verify and ensure proper compliance of the tourism related law. It is also entrusted to review and recommend the revision of the tourism levy and submit a bi-annual report on tourism levy exemption to the finance ministry.

The Bill also identifies offenses, which include failure to submit supporting documents or submitting false documents. Fines will be imposed as per the Rules and Regulations of Tourism Council of Bhutan for failures to comply with the law.

The environment and climate change committee had proposed major changes, including the name of the Bill. It was first introduced as Tourism Levy Bill.

Citing many changes the committee had proposed, Panbang MP Dorji Wangdi said that government had not worked adequately on the Bill. “The Bill has been changed significantly, which shows that government didn’t do enough homework,” he said.

However, Prime Minister Dr Lotay Tshering said that the House was empowered to incorporate changes into a Bill.

Deliberations completed yesterday and the House is scheduled to adopt the Bill today. It seeks to repeal Tourism Levy Bill of 2018.

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