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This week, the final list- foreigners who are not tourist required to pay Sustainability Development Fund (SDF), and the waiver was finally announced by the Department of Immigration.

This announcement raises two concerns, whether government can impose levies without parent law enacted by the parliament and what it means to host agencies particularly academic institutions hosting numerous international conferences and research scholarships.

Article 14 (1) of the Constitution states that “taxes, fees and other forms of levies shall not be imposed or altered except by law.” Explaining this, the Supreme Court in the case of Opposition vs. Royal Government of Bhutan (2011), said while “the power of taxation is indispensably necessary to constitute an efficient government” and Article 14(1) is unambiguous that, levies can imposed only after authorized by the parliament. This is because parliament represents the people and His Majesty who are the custodians of people’s welfare and not the executive. If the levies imposition is legal, the requirement of host agencies including academic institutions to pay SDF for conference participants will immensely undermine the academic and scholastic discussion and severely impact the transformation initiated under the wise leadership of His Majesty.

This is because the most of Bhutanese academic institutions depend on donors to fund international conferences, conduct high quality research. Most donors would not be willing to sponsor such huge SDF for every participant. For example, for one conference, if ten participants are foreigners for three-day conference out of 30 participants, the host must pay around Nu 8 million alone as SDF. The past trends indicate that even our government is often reluctant to provide Nu 2 to 3 million for three to four days conference to cover everything.



This means, Bhutan’s dream of building world class tertiary education will remain distant dream. The quality of both faculty and students will be greatly influenced by their exposure to such international interactions on regular basis. International conferences and trainings are fundamental to quality of education and teaching learning. Not everything can be done virtually. The possible consequences will be not just on public academic institutions but the nation and our future generation- the learners. Even if the SDF is not imposed, it does not mean the national economy will not generate revenue. Due to a high number of participants, the government would still generate huge foreign currency besides generating additional employment in the service sector.

First, international donors would pump in millions of foreign currencies to fund many international conferences. Second, the participants would still spend a substantial amount of foreign currency for their accommodation, transportation, conference registration fees and visa fees. For example, the 4th International Vajrayana Buddhism Conference which concluded last week brought in 250 international participants. Estimating 6 days for each participant, even if one participant spends 200 USD for accommodation, food and transportation, they would have brought in 300,000 USD in conference. But due to SDF, if this did not happen, then government would have lost that much revenue. Government has many better options measures like imposing heavy penalties for misuse including requiring double the SDF in the name of conferences or training.

It also reduces the SDF like 100% for first conference, 75% to second conference and 50% reduction if more than three conferences are held in a year. The government can also exempt SDF only during conference duration but impose full SDF for any additional days excluding travels. Unless, government change the current system, it would probably be like a penny wise and pound foolish.”

Sonam Tshering

Lawyer, Thimphu

Disclaimer: The views expressed in this article are author’s own.



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