The Economic Affairs Committee of the National Council (NC) proposed the reduction of sales tax for meat, poultry products, and cement import.
Finance Minister Namgay Tshering introduced the Tax Bill of Bhutan 2022 to the National Council yesterday.
The Committee Chairperson, MP for Paro, Ugyen Tshering, presented the committee’s recommendation to the house yesterday.
The committee proposed 10 percent sales tax reduction for poultry products. The National Assembly amended sales tax to 50 percent.
Ugyen Tshering said that although there is no egg shortage in the country currently, in the future there could be supply disruptions in the country. “We might have to import during that time and it will be very expensive for the people with high sales tax.
The committee has proposed sales tax reduction for meat items to 10 percent. The government has proposed 20 percent sales tax.
Ugyen Tshering said that local meat prices increase because import price is very high. He said that during the lockdowns, meat shops were selling pork for Nu 700 to Nu 800 per kg.
MP for Sarpang, Anand Rai, said that Bhutan imports parental broiler stock. If the sales tax is high, he said that it would impact the farmers and poultry business in the country.
MP for Haa, Ugyen Namgay, however, said that if the import sales tax is high it would benefit the poultry business in the country. He said that most of the poultry businesses in the country are not able to sell eggs. ”The sales tax could be between 10 to 50 percent.”
MP for Chukha, Sangay Dorji, said that the poultry business is easy to start and profitable but also very risky. “Reducing sales tax to 10 percent will impact the poultry business,” he said.
The committee also proposed doing away with sales tax for oral applications such as nicotine gum. The government has proposed a 100 percent sales tax for oral applications.
Ugyen Tshering said that it should be made cheaper to help people quit alcohol consumption and smoking.
The committee proposed to retain the government proposal of a 15 percent sales tax on the import of cement-related products. The National Assembly amended the sales tax to 30 percent sales tax.
Ugyen Tshering said that cement factories in the country export 70 percent of the total production.
He said that the factories have to carry out maintenance and sometimes there is shortage of raw materials rendering the factories unable to operate for around six months. “During such times, we need to import and the price will be very expensive.”
Hydro projects, he said, use imported premium cement quality and that there should be an alternative source in the future.
MP for Trongsa, Tashi Samdrup, said that the sales tax for cement should be increased since 70 percent of the production is exported.
Eminent Member Dasho Tashi Wangyal said that if the cement price is high, construction prices will increase which will have an impact on house rents.
MP for Punakha, Lhaki Dolma, proposed doing away with the 30 percent sales tax for the local entertainment business.
The House accepted most of the amendments proposed by the Committee.