Opposition questions royalty waiver again


he royalty waiver for tourists vising the six eastern dzongkhags will undermine the ‘high value low impact’ policy, according to the opposition members.

At the National Assembly yesterday during the third reading of the Tourism Levy Exemption Bill of Bhutan, 2017, opposition members said that the waiver overlooks the concept of equitable balanced regional development.

Pangbang MP, Dorji Wangdi said that even southern and central dzongkhags are yet to reap the benefits of tourism. He suggested including 15 other dzongkhags where tourism has not developed should the royalty waiver be implemented.

Nubi Tangsibji MP, Nidup Zangpo questioned whether the USD 65 royalty waiver was the only option to promote tourism in eastern Bhutan. He said that local festivals in the east are least sold and marketed.

Opposition Leader Pema Gyamtsho (PhD) also suggested slashing the royalty by half instead of complete waiver. He added that the royalty fee could be used to institute tourism development fund in the east. “Waiving off royalty is the easiest thing to do,” he said.

Both the recommendations from the Opposition could not garner enough support through a show of hands.

However, the chairperson of the finance committee that reviewed the tourism levy exemption bill, MP Karma Tenzin said that the royalty waiver is a recommendation from Tourism Council of Bhutan.

On why only for the six eastern dzongkhags, education minister Norbu Wangchuk said that the Tourism Council of Bhutan has already developed an eastern circuit. Waiving the royalty would be complemented with resumption of domestic air services and widening of the East-West Highway.

While the finance ministry proposed the waiver for a period of three years, the committee has extended it to five years. After much deliberation, the expiry date of the royalty waiver was retained until December 31, 2020.

Lyonchhen Tshering Tobgay said that the bill is being proposed as money bill and shall take effect from the date on which it was first tabled in the house. He, however, said that since the royalty waiver is a trial scheme, three years duration is good enough. If kept at five years, he said it would be inconvenient to modify, as it will become an Act.

Following a lengthy discussion, members were confused as to whether the tourism levy exemption bill should be a bill or an Act. This was because some members said that budget and appropriation bill remains as a bill even after endorsement.

Drametse Ngatshang MP, Ugyen Wangdi said even the fiscal incentives Act was proposed as a bill and upon completing the legislative cycle became an Act. Pangbang MP Dorji Wangdi added that budget is an estimate of expenditure and revenue. “Even after endorsement, it is still an estimate,” he said.

The house also deliberated the need to remove the chapters on roles and responsibilities, offense and penalties and miscellaneous provisions from the bill. MP Ugyen Wangdi said that penalties should be in line with existing laws. For instance, submitting false document is a serious offence and penalties are adequately covered in the Penal Code. Others argued that such clauses are irrelevant in a money bill.

The finance committee chairperson clarified that the provisions should be retained in order to provide more clarity because the tourism rules and regulations do not cover these provisions and there isn’t any act on tourism. The House agreed to retain the provisions based on majority decision.

The House will vote to pass the Bill today.

Tshering Dorji

1 reply
  1. irfan
    irfan says:

    The mention of the ‘Tourism Levy Exception Bill, 2017’, roughly deals with a waiver not exceeding something like 32.5 percent of what a foreign tourist is paying per day depending on the season of visit. If it’s only about an objective of equitable balanced regional development, is there a possibility here to think in another direction!

    If the Tourism Council of Bhutan can play a role of regulatory mechanism to promote healthy competition in tourism sector for equitable balance regional development; it may be possible to think about having a zonal based development philosophy rather than just a policy. The districts can be grouped in zones and that doesn’t necessarily mean that they all need to be neighbouring districts only.

    A district each from north, west, south and east can be grouped together to form a tourism zone in an extreme example of grouping. Forming a zone of only neighbouring districts simply creates another district with extended borders when resources remains as they have always been in that zonal geography.

    Access to financial resources may see growth with a zone of all neighbouring states, but one cannot expect the tourists to arrive only to avail some discounts on expenditure if there is no experience, just travel or otherwise, to take both as a product or service.

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