No exemption on income tax for cash crop

Finance minister Namgay Dorji, during the question-answer session of the Parliament yesterday, said that the government would not be able to exempt income tax imposed on the cash crop.

The minister justified that such an exemption would create two rules, which will cause inconvenience for the government.

Lyonpo Namgay Dorji was answering to the Samtse’s Dophuchen-Tading Member of Parliament Tek Bahadur Subba’s query on whether the government could exempt the taxes since cash crop income of cardamom was taxed in rural places recently.

The MP reasoned out that the government had increased the personal income tax slab to Nu 200,000 for 2016 and it benefitted the people. “In a similar manner, if the government could exempt the income tax from cash crop, it would alleviate rural livelihood,” he said.

MP Tek Bahadur Subba requested the finance minister to clarify the taxation policy on agriculture products, especially on tax incentives on cash crops and non-uniformity in tax collection.

Lyonpo Namgay Dorji explained that income tax for cash crops like apple, cardamom and orange were collected according to Income Tax Act 2001. “People have been paying the tax since 2001 and it is not this government who imposed the tax.”

In 2008, 176 farmers paid Nu 8.8 million (M) as income tax from the cash crop. The amount increased to Nu 9.6M collected from 158 farmers.

The finance minister said that farmers will not be imposed tax on 30 percent of the income they earn from cash crop, as that will be deducted as expenses.

The tax collected from cash crops increased to Nu 9.6M in 2010. It was collected from 158 farmers.

Tashi Chophel

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