KP Sharma

The Opposition Party has urged the government to review the 2022 tax revision, which is being blamed for the sharp rise in vehicle prices and other goods following the lifting of the import moratorium

In a press release yesterday, the Opposition Party defended the tax measures enacted by the previous government as necessary during the economic crisis but urged the current administration to adopt a new approach that aligns with the present economic conditions.

Bhutan Tendrel Party acknowledged public concerns about the rising costs of vehicles and other goods and stressed the need to consider these sentiments in policymaking to ensure the well-being of the citizens.

The Party highlighted the need for a thorough evaluation of the country’s dependence on imports, the growth of local industries, and the affordability of essential goods.

With the economy showing signs of recovery and the moratorium on vehicle imports being lifted, the Opposition said that it was time to recalibrate fiscal policies to better reflect the current economic landscape.

The Party urged the government to assess whether the 2022 tax revisions have met their intended objectives, such as reducing the trade deficit, preserving foreign currency reserves, promoting public health, and supporting local industries.

Further, the Party called for a comprehensive review of tax policies during the upcoming winter session of Parliament.

The Party also recommended broad stakeholder engagement, involving the private sector, civil society, and experts, to ensure that future tax policies are fair, effective, and are aligned with the country’s development goals.

This inclusive approach, the Party argued, would help in crafting policies that are more responsive to the needs of the people.

Reflecting on the economic challenges faced in 2022, the Party said that Bhutan was severely affected by global disruptions, including the Covid-19 pandemic and the Ukraine-Russia conflict.

Such events led to rising inflation, a major trade deficit, and a dangerous depletion of foreign currency reserves, adding that the previous government responded by implementing tax revisions that targeted non-essential and harmful goods while reducing taxes on essential commodities.

The Party said that the goal of the taxation was to stabilise the economy by reducing the trade deficit, preserving foreign currency reserves, and supporting local industries.

Despite defending the rationale behind the 2022 tax measures, the Party has requested the current government to evaluate their effectiveness.

The party also questioned whether the objectives, such as reducing the country’s reliance on imports and fostering local industry growth, have been achieved.

Meanwhile, Druk Thuendrel Tshogpa (DTT), a political party outside Parliament, raised concerns about the affordability of vehicles following the price hike.

In a social media post, DTT stated that many potential buyers are struggling with the sudden increase in prices, which has led to calls for government intervention.

DTT pointed to the role of middlemen in the vehicle import process as a key factor contributing to the price surge.

DTT suggested that allowing direct purchases from manufacturers could eliminate these additional costs, making vehicles more accessible to the general population, and proposed a policy that would enable each family to own one vehicle, potentially aiding middle- and lower-income families.

In response to media reports that the government has formed a committee to investigate the issue, former finance minister, Namgay Tshering, expressed his views on social media.

He criticised the government for passing the blame onto the previous government and urged a careful reassessment of the situation.

Namgay Tshering pointed out that the current government holds the power to either reduce taxes or continue with the policies of the previous government.

He said that tax revisions are proposed as a money Bill, and the ruling government has a decisive role in its adoption in Parliament.

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