Sherab Lhamo

Aimed at enhancing Bhutan’s domestic mobilisation through strengthened capacity in tax administration, the Department of Revenue and Custom (DRC) and United Nation Development Programme launched Tax Inspectors Without Border (TIWB) programme, yesterday.

Four technical experts from Poland will assist the Department of Revenue and Customs (DRC) to conduct tax audits on International taxation and transfer pricing, helping DRC to effectively navigate complexities of the global tax landscape, said the United Nation Development Programme representative, Mohammad Younus.

Department of Revenue and Customs, Director General Sonam Jamtsho said, that in Bhutan International taxation is a new subject that is slowly becoming very important for the department to tackle, so that is where we lack our expertise.

“That is where the four experts from Poland are going to assist us for a year in auditing skills related to transactions, related to international taxation and transfer pricing,” he said.

The first phase of the TIWB programme with the Central Board of Direct Taxes, India which also helped in transferring knowledge in the areas of International Taxation, Transfer Pricing, and Auditing, was not very successful as it coincided with the pandemic, and had to be done virtually, which was not very effective, said DRC official.

TIWB is a joint initiative of the Organisation for Economic Cooperation and Development and UNDP supporting countries in building tax audit capacity. TIWB programs complement the broader efforts of the international community to strengthen tax cooperation and contribute to the domestic resource mobilisation (DRM) efforts of developing countries.

Transfer price means a company operating in multiple jurisdictions and they make strategies in a way that they try to shift their profit to the lower tax jurisdictions. This kind of tax avoidance they are going to tackle through and improve their skills in transfer pricing auditing, said the DRC official.

Finance Minister Namgay Tshering said that the deployment of the four Polish tax experts is more than just a technical assistance program. “The knowledge and experience of the experts will make a significant difference in building the capacities of Bhutanese tax officers and strengthening the foundations of Bhutan’s economic growth.”

Poland’s Minister of Finance, Magdalena Rzeckowska said, “The four experts’ dedication and knowledge will undoubtedly contribute to the enhancement of Bhutan’s tax administration capabilities. And look forward to the positive impact of the joint efforts.”

Meanwhile, DRC and UNDP also launched new tax advocacy materials consisting of advocacy videos on property tax and a property tax calculator, helping to automatically calculate the tax payable, and giving an estimate of how much an individual has to pay, which is available on DRC’s website.

Sonam Jamtsho said that individuals were having doubts about property tax being charged, so to clarify their doubts on how much taxes are charged, the individuals can now calculate themselves, through the property tax calculator.