To control the increasing number of vehicles in urban hubs such as Thimphu and Chukha
Vehicle import quota availed to “privileged public officials” should be done away with the aim to control import of vehicles.
This is one of the recommendations in the Review Report of Policies related to Vehicle Import, the National Council’s Economic Affairs Committee presented yesterday.
The committee’s chairperson, Ugyen Tshering said the quota facility had weakened the effectiveness of the government’s fiscal tools to reduce vehicle imports.
With the availability of affordable vehicles, rising number of pool vehicles, loss of revenue, the continued grant of vehicles quota was irreverent, he said. The chairperson also attributed the traffic congestion, accidents and, air and noise pollution to the rapid increase in vehicle numbers.
Thimphu alone saw an increase of 3,469 vehicles from 52,322 in 2018 to December last year.
According to the review report, the quota or tax subsidy was given when pool vehicles were scarce and public servants could not afford vehicles.
The number of quotas issued by the finance ministry increased from 967 in 2008 to 2,344 in 2018. In ten years, a total of 15,805 quotas were issued.
The quotas were often traded despite rules forbidding against such practices. As a result, two vehicles were bought from a single quota, states the report.
Besides public officials, private tour operators, bus operators, private schools and colleges, registered Non-government Organisations and hydropower projects are also exempted from the import tax.
According to the Royal Monetary Authority, annual revenue of Nu 3.1 billion (B) was forgone due to vehicle import subsidy.
The committee was of the stand that the government has to bear significant financial loss if the issuance of quotas continued.
The import of vehicles is also linked with the outflow of foreign exchange reserves of the country.
Going by records with RMA, Rs 15.44B reserve were drained out by the import of vehicles from 2015 to 2018. And a total of USD 33.4 million (M) outflowed (from 2016 to 2018).
The government has numerous policies in controlling the rapid rise in the number of vehicles in the country. Policies include the Transport Policy 2006 and National Transport Policy 2017 (draft), International Trade Policy of the Kingdom of Bhutan 2004, fiscal policies such as taxes and duties, the monetary policy of Loan to Value (LTV) Ration, and environmental policies.
Despite several measures implemented by the government, Deputy Chairperson of the Committee, Anand Rai said that the efforts had not been successful.
The Committee proposed endorsing an effective National Transport Policy and dzongkhags to ensure adequate reserve space for urban infrastructure to integrate public transport in the future.
The committee recommended designing targeted interventions such as introducing congestion charges, directing local governments to enforce parking requirement in buildings and improving the public transport system.
However, some members suggested reviewing the recommendations on doing away the vehicle import quota reasoning that it alone would not solve the issue related to the increase in import of vehicles.
Mongar’s MP Sonam Pelzom said that concentration of the vehicles in urban hubs should not decide for the public officials in rural dzongkhags reasoning that there was no concern of congestion in these dzongkhags.
Others proposed having a coherent transport policy to govern the transport sector and to review the Road Safety and Transport Act 1999. The House will continue the deliberation on January 31.