Thukten Zangpo

During the question and answer session in the National Assembly, Prime Minister Dr Lotay Tshering made it clear that the government has no intentions of revisiting or amending the Tourism Levy Act of Bhutan 2022. 

The Act, which hiked the Sustainable Development Fee (SDF) to USD 200 per night, aims to stimulate the economy by leveraging tourism as a substantial source of foreign currency.

MP for Dramedtse-Ngatshang, Ugyen Wangdi, raised concerns about the frequent changes in the SDF, which have caused inconveniences for the tourism sector and hindered the Act’s original purpose. He inquired whether the government would consider revising and amending the Act.

Prime Minister said that the government had not made significant alterations to the USD 200 SDF. However, adjustments were made to the Act to provide SDF incentives for tourists. Under the new provisions, visitors can pay the USD 200 SDF per night for the first four, seven, or twelve nights and receive additional nights without the daily levy, depending on the nature of their activities.

He added that the Act gives a provision where the competent authority may provide an exemption or concessionary levy rate on applicable SDF.

Prime Minister said that the increased SDF may have contributed to a decline in tourist arrivals but emphasised that many countries worldwide are still recovering from the impacts of the Covid-19 pandemic. 

Despite the challenges, Bhutan has experienced an increasing number of tourists, with approximately 53,000 visitors since the reopening in September last year, including 10,000 tourists who availed themselves of the previous SDF rates.

The government is actively engaging in ongoing discussions with key stakeholders in the tourism industry to explore solutions and innovative ideas. Prime Minister emphasised the need for strong support from the Bhutanese people and collective efforts to achieve fruitful outcomes although there is room for revisiting the Act.

In response to a question from MP for Khar-Yurung, Tshering Chhoden, about strategies and policies for private sector development, Prime Minister emphasized the importance of bringing fresh ideas to foster growth. He cited the recent Tourism Act as a policy that would benefit the country in the long-run, but also stressed the need to acknowledge that the current circumstances are far from normal and require adaptation.

Addressing concerns raised by MP for Bartsham-Shongphu, Passang Dorji, regarding economic recovery strategies in the short, medium, and long-term, Prime Minister said that there was need for innovative solutions as Bhutan faces challenges in balancing imports and exports. 

Acknowledging the competitiveness and difficulties of manufacturing goods for export when compared to neighboring countries like India and China, Prime Minister emphasised the government’s focus on skills development and investing in hydropower and solar power projects to attract foreign currency.

The government has been working actively on skilling, re-skilling, and up-skilling initiatives to address the aforementioned challenges.

Significant investments are being made in hydropower projects, such as the Kholongchhu Hydropower Project, and the commencement of work on three small hydropower plants, with four new small projects set to begin this year.