The government’s proposal to waive off tourism royalty came under scrutiny at the National Assembly yesterday.
The waiver of royalty USD 65 a day for tourist visiting the eastern dzongkhags was debated in the house following the first and the second reading of the Tourism Levy Exemption Bill of Bhutan 2017, which the finance minister introduced as a Money Bill.
While acknowledging the intent of promoting tourism in the east, Panbang MP, Dorji Wangdi, questioned the benefits and measures being proposed to do so.
The royalty, now known as sustainable development fee, is levied in addition to the minimum daily tariff of USD 200 during lean season and USD 250 during the peak season.
“We have to understand that tourists don’t visit eastern dzongkhags not because they cannot afford to pay USD 65, but because of poor road conditions and lack of infrastructures,” he said.
In 2016, he said about 54,600 international tourists visited Bhutan. This is 11 percent higher than the 2015 figure. However 2015 saw 15.7 percent decline in tourist arrival compared with 2014. The main reason cited was transport and trail safety combined with inadaptable nature of local cuisine. Lack of new destination, he said is also another reason, contributing to low tourist arrival in the country.
The Nubi-Tangsibji representative, Nidup Zangpo also added that royalty and tax waiver are the easiest things to do and difficult to reintroduce. The government, he said talks about economic self-reliance but at the same time grants tax exemptions frequently.
However, agriculture minister, Yeshey Dorji said that road conditions are being improved through the widening of the East-West Highway, domestic air services have been introduced and new trekking routes in the east have been identified. “Royalty waiver is to compliment these efforts to boost tourism in the east,” he said.
Wamrong MP, Karma Tenzin said that such flexibility on royalty is not something new. In the past, he said USD 65 royalty has been reduced for tourists staying in the country for more than nine days to encourage more tourists visiting the country.
Finance minster Namgay Dorji said that this provision of royalty waiver for tourists visiting east is only valid for three years. The larger motive of this move, he said, is to boost number of tourists visiting the country and increase revenue.
He said that the government is already working on other prerequisites and infrastructure needed to boost tourism such as hotels, restaurants and other amenities. This would also give employment opportunities in addition to 30,000 people already employed in tourism sector, he said.
Today only two percent of the international tourists visit the eastern dzongkhags.
However, the opposition leader Pema Gyamtsho (PhD) suggested that instead of giving exemption at source, a refund method would be more practical.
“If exemption is given at source, there are possibilities of tour agents misusing it and the issue is about how to monitor this,” he said. For instance, agents may not take their visitors to east after availing the royalty waiver. He said that the government should charge the regular royalty and after having shown the evidence of visiting the identified dzongkhags, a refund may be provided.
Instead of extending the waiver to eastern dzongkhags in the Bill, he suggested a change so that other dzongkhags where tourism has not advanced could be included. Zhemgang, for instance, he said has potential for tourism and is one of the least developed dzongkhags.
The government meanwhile has promised to ensure that 20 percent of tourists visit eastern dzongkhags to ensure uniform distribution of economic benefits from the sector.
The Bill is forwarded to the finance committee of the house for review and it would be tabled on November 29.