… contributes to 13.7 percent of GDP
The national revenue saw a growth of 8.9 percent with the collection of Nu 39.04 billion (B) in the fiscal year 2021-22 compared to the previous fiscal year. This, according to the National Revenue Report 2021-22, was equivalent to 13.7 percent of the country’s gross domestic product (GDP).
With economic activities resuming after the pandemic, the tax revenue increased to Nu 25.84B, an increase of 25.1 percent from the previous fiscal year 2020-21. This is attributed to higher collection from corporate income tax, personal income tax, customs duty, sales tax, and excise duty.
Non-tax revenue, which is mainly dividends, interests from corporations, and administrative fees, contributed Nu 13.2B, a decrease of Nu 1.99B during the same period in the previous year.
Tax revenue contributed 66.2 percent of the total and non-tax revenue contributed 33.8 percent in the fiscal year 2021-22.
Corporate income tax collected in the fiscal year saw an improvement to Nu 10.06B from Nu 7.24B in 2020-21. It contributed 25.8 percent of the total revenue. This was because of the risk-based assessment conducted by the tax auditors, an increase in remittances of tax deducted at source, declarations at check posts, and an increase in tax collection from the ferrosilicon companies.
Business income tax increased to Nu 1.3B from 1.08B. The personal income tax also saw an increase to Nu 1.96B from Nu 1.37B during the same period.
The revenue collected from immovable property, special economic zones, or protected areas and taxes on capital transactions saw an increase by 4 percent at Nu 144.63 million (M) in the fiscal year 2021-22 compared to the previous fiscal year.
However, the municipal tax, house tax, and underdevelopment land tax saw a decrease of 6.6 percent at Nu 8.39M during the same period.
Sales tax revenue jumped to Nu 5.6B from Nu 4.11B. Sales tax in goods and commodities, petroleum products, hotels and restaurants, including tobacco products contributed to the tax.
Green tax on motor vehicles and fuel saw an increase by 67.2 percent to Nu 992.86M in the fiscal year 2021-22.
Excise duty, which is a domestic levy collected from the Army Welfare Project Limited on its product, also saw an increase of 13 percent to Nu 386.23M.
However, the customs duty, which is the tax collection from international trade and transactions, saw a decrease of 8.1 percent. It was recorded at 509.98M. This was mainly because of the reduction of the customs duty rate to a flat rate of 10 percent.
Royalties recorded a decrease of 9 percent to Nu 4.39B during the same period. This was mainly because of decreased collection from mines and minerals royalty and slightly decreased hydropower royalty.
In non-tax revenue, Druk Holding and Investments contributed a dividend of Nu 3.02B to the government, and other corporations contributed Nu 105M. During the same period, the overall dividend increased by 34.3 percent.
Both the Royal Monetary Authority (RMA) and Mangdechhu Hydropower’s net profit transfer decreased by 48.3 percent in the same period. It was reported at Nu 4.84B.
Administrative fees that include collections, economic services, social services, and general services contributed Nu 834.44M in the fiscal year 2021-22, an increase of 9.2 percent as compared to the last fiscal year.
According to the RMA report, the tax revenue in this fiscal year 2022-23 is expected to grow by 4.7 percent to 13.8 percent of GDP with improvement in domestic tax revenue such as customs duty, sales tax, domestic excise duty, and green tax.