…13, 300 property owners yet to file the tax

Thukten Zangpo

The revenue from the property tax for the income year 2023 grew by 911.9 percent compared to the revenue collection in the previous year.

In absolute figures, it was recorded at Nu 616.94 million compared to Nu 60.97 million, an increase by Nu 555.97 million.

This increase in the property tax revenue, according to the finance ministry, was because of the introduction of value-based property tax.

The government implemented the revised property tax after the winter session of the Parliament in 2022 passed the Property Tax bill of Bhutan 2022. The revision came with 0.1 percent tax on the taxable value of land and building.

For the income year 2023, the property tax filer saw an increase to 168, 956 individuals compared to 150, 279 for the income year 2022.

Despite the last date for property tax filing on May 31, there were still 13, 300 property tax non-filers.

According to the Department of Revenue and Customs (DRC), the late filling would attract a penalty of Nu 100 per day and penal interest of 24 percent per annum on tax payable.

Tax filing after three months from the due dates shall attract non-filing penalty as per the Section 31, Chapter 5 of the Income Tax Act of Bhutan 2001.

Under the property tax, some of the concessions received are 50 percent concession on cultivated dry land (kamzhing), 90 percent concession of wetland (chuzhing), 50 percent concession for self-occupied traditional house, 70 percent concession on traditional house in protected areas, and 90 percent concession for highland communities.

An official from the finance ministry said that 43, 602 taxpayers availed of cultivated concessions and 94, 064 plots availed of kamzhing concessions. The total amount availed as concession was equivalent to Nu 30.91 million.

The DRC also notified that those property owners with the pending thrams are requested to visit the nearest regional revenue and customs office or the local government offices to make property tax payment since online payment for pending thrams through the National Digital Identity portal is currently not available.

The personal income tax (PIT) revenue for the income year 2023 saw a decrease to Nu 1.77 billion compared to Nu 1.92 billion in the previous income year.

The PIT filers increased to 68, 348 from 63, 812 in the income year 2022. While 7, 976 were non-filers.

An official from the finance ministry said that the PIT saw a decrease by 8.03 percent mainly because of an increase in PIT of few top taxpayers in 2022. These taxpayers were main shareholders of one of the ferro-silicon companies, which declared a 350 percent dividend for the year 2021 and a 400 percent interim dividend in 2022, both paid in 2022.

The business income tax (BIT) revenue saw a decrease to Nu 754.55 million from Nu 1.12 billion, a decrease of 32.01 percent.

The BIT filers saw a decrease to 41, 515, down from 51, 016 in the previous income year. While 1, 687 taxpayers are yet to file the BIT.

“For the income year 2023, it is a self declared BIT which is subject to change after the assessment as most of the accounts filers undergo the assessment process. Moreover, some of the top taxpayers have not filed their return yet,” the official said.

The corporate income tax (CIT) revenue saw a decrease by 2.75 percent to Nu 10.12 billion from Nu 10.39 billion in the previous income year.

There were 357 CIT filers in income year 2023 compared to 530 in income year 2022. CIT non-filers were reported at 176.

According to the finance ministry, the decrease in CIT revenue was mainly because around 100 expected CIT units have not yet filed their return for the income year 2023. “As of now, there are only 357 CIT filers whereas we expect more than 500 filers for the said income year.”

The DRC also shared that their main challenges include lack of integrated data and information in RAMIS, lack of risk management module in RAMIS, and RAMIS performance issue during peak tax filing season.

Additionally, the resource constraints as tax authorities face challenges with limited budget and manpower, outdated income tax and rules lacking provisions for international taxation and digital assets, and lack of capacity building.