This week, the Economics and Finance Committee of the National Assembly made a sketchy recommendation on tax bills causing confusion among fellow members.
The Committee repeatedly justified the recommendation to reduce taxes on tobacco products while increasing, doubling, or introducing new taxes on even essential goods such as butter and cheese. This could further add uneasiness among the public servants since the same Committee is also assigned the Clean Wage Bill.
A need to make decisions based on evidence and not presumption is being felt in the house.
The Committee’s decision to recommend heavy taxes for numerous essential items but recommending non-essential items like tobacco items is a serious concern if they understood the rationale for the purpose of taxation on these items. The World Health Organization (WHO) records say that “tobacco use kills eight million people yearly and is the leading cause of preventable deaths globally. Evidence shows that significantly increasing tobacco excise taxes and prices are the single most effective and cost-effective measure for reducing tobacco use.”
Bhutan, as a member of the WHO Framework Convention on Tobacco Control, has the mandate to impose heavy taxes on tobacco products under Article six of the Convention. WHO explained that “raising taxes on tobacco products which lead to increases in their price makes tobacco less affordable, people use it less and youth initiation is prevented, and youth and low-income groups are more responsive to increases in tobacco prices and enjoy the health and economic benefits of quitting and not starting”. But the Committee’s reasons for the recommendation were contrary to evidence-based data. Tobacco-related diseases have a huge economic burden on our own healthcare system.
The Committee’s recommendation which lost only by one vote shows the lack of taxation purpose on tobacco products among the legislative members. Further, there is no evidence of deaths caused due to withdrawal symptoms of tobacco while deaths due to withdrawal from drug use are high. Should we then legalise the use of drugs since it has more compelling reasons?
Similarly, the increase or introduction of green taxes on vehicles shows the lack of understanding of climate change itself and other situations in the country. First, except for Thimphu, public transport in other dzongkhags, except for taxis, is almost non-existent. Second, waste management is a serious issue causing far more environmental and health hazards compared to the importation of vehicle parts and vehicles in the country. Even developed dzongkhags like Paro lack basic waste segregation facilities and waste collection is done only once a week without segregation.
His Majesty had to send de-suups to clean Paro town for days recently. Third, climate change is irreversible and developed countries are pushing hard to evade their duties causing huge losses to the least developed countries, including Bhutan.
The best solution to fight climate change is increasingly leaning towards adaptation and mitigation rather than prevention, particularly in a small nation like Bhutan through compensation for loss and damage from the developed nations. COP27, which concluded yesterday in Egypt with over forty thousand delegates and observers, yielded no impressive outcomes to fight against climate change.
At the local level, if we need to fight. We first need to manage our waste as per the existing waste management laws across the country, not just in Thimphu. It is time our representatives moved towards evidence-based data instead of presumptions.
Sonam Tshering
Lawyer, Thimphu
Disclaimer: The views expressed in this article are author’s own.