NC forwards two Tax Bills to NA

Staff Reporter

National Council passed the Tax (Amendment) Bill and the Income Tax (Amendment) Bill in the past two days.

On both the Bills, the National Council recommended that the commencement date of the Bill should be in accordance with Section 46B of Public Finance (Amendment) Act 2012.

The section states: “The imposition or increase of any tax or abolition, reduction or remission of any existing tax once passed as law by Parliament, shall be applied retroactively from the date it was initially tabled in the National Assembly.”

Members said, therefore, the Bill once passed should be effective from the day Finance Minister introduced it in the National Assembly.

Members raised concerns about shrinking internal revenue with numerous exemptions in the two Bills.

The Bills that grant exemptions are implemented earlier than those Bills that would earn revenue. This could result in loss of revenue, members said.

Given that the country will need all available resources to successfully transition to a middle-income group country, members said that the timing of tax exemptions was wrong.

National Council’s Economic Affairs Committee on February 5 proposed not to pass the Income Tax (Amendment) Bill 2020 given the risk of widening the country’s fiscal deficit when the House was in the final deliberations on the Bill yesterday.

The Committee’s chairperson and the member from Paro, Ugyen Tshering presented the Income Tax (Amendment) Bill after the committee deliberated again on some sections considering the views other members proposed changes on the previous day.

Ugyen Tshering said the proposed revisions in the Bill would seriously impact the national goal of economic self-reliance.

Not passing the Bill was one of the two options the committee proposed. However, other members did not support the proposal and chose to continue deliberations and adopt the Bill.

The House chose to pass the Bill with amendments in the clauses stating their concerns.

The House also recommended retaining the income tax for companies other than state enterprises under full tax liability at 30 percent of the net profit. The National Assembly had passed the reduction to 25 percent.

Other recommendations include Permanent establishment at the rate of 30 percent of the net profit; The total dividend income for Bhutanese companies not exceeding Nu 10,000 per annum shall be exempt from PIT and allowable deductions for education expenses increased to Nu 350,000. NA had increased it to Nu 250,000.

The National Assembly had adopted Nu. 300,000 per annum of the net taxable amount under section 13.1 shall be exempt from taxation as a basic exemption. National Council recommended reducing it Nu 200,000.

National Council also adopted the Tax (Amendment) Bill yesterday. Of the 22 members present, 19 voted in favour while three abstained on adopting the Bill.

The House recommended against doing away the five percent mobile voucher tax on all postpaid, prepaid, and seven percent sales tax on tourist SIM.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply