Dechen Dolkar 

The government last year forswore Nu 108.7M from the taxes from the duty-free entitlement, according to the Ministry of Finance (MoF).

From next year, the duty-free quota privilege will be given only to diplomats governed by the international laws, conventions and covenants ratified by the parliament of Bhutan and International employees governed by the Bilateral and multilateral agreement signed by the government of Bhutan.

Starting January next year the quota for duty-free goods will be discontinued for those who were entitled so far. This enabled those with a quota to buy high-quality goods like wine, whiskey, cosmetics, as well as other non-consumable products free of taxes from the identified retail outlets.

Over 1,226 individuals were entitled to and have availed of the quota so far.

Executives and specialists of civil service, cabinet ministers and the members of parliament, drangpons, armed forces personnel above the rank of Lt. Colonel, head of constitutional office and attorney general, heads of the international agency, and the chairperson of the Royal Privy Council are entitled to duty-free quota.

Five eminent Lopens of Zhung Dratshang, the highest personal income taxpayers, Indian military officers (IMTART and GREF), and honorary consuls of foreign countries are also entitled to duty-free quota.

However, the Cabinet arrived at the decision after a review showed that duty-free quota had not just hit redundancy but had outlived its intended purpose.

The duty-free quota was introduced in 1989 to provide access to consumer goods that originated from advanced countries, support the tourism sector, operate as an enterprise on a commercial basis, provide a source of foreign exchange and generate revenue for the country.

According to the Office of Prime Minister, memberships proliferated over the years leading to loss of revenue and misuse.

“Also, with the steady growth of the economy, similar products are now adequately available in the market,” the officials said.

According to the PMO, as we strive to bring about reform driven by accountability and transparency, and as we introduce a clean wage system, we are convinced that such perks have lost relevance.

“Such steps, though small, will go a long way in professionalising the processes and bringing about the change that we aspire,” the PMO said.