The National Assembly’s amendment in the Property Tax Bill 2020, making the property seller bear the transfer tax hit a bump in the National Council yesterday.
Council members said that who pays the tax should be left to those buying or selling and as per the sales deed they agree to.
During deliberation on the Bill, Thimphu’s NC member, Tshewang Rinzin, said that the party specified in the sales deed should pay the property transfer tax.
Supporting his argument, Bumthang NC member Nima, said that the government should be least bothered by who pays the tax as long as the tax is paid. “If there is no problem with the buyer and seller, it should not be an issue.”
Seller, as identified in the Bill is the owner of the property including the government, financial institutions and other agencies that auctions and sells properties.
If Section 7 is amended, NC member for Haa, Ugyen Namgay, said that it should align with Section 8. Section 8 of the Bill states: “Notwithstanding Section 7 of this Act, the property transfer tax shall be payable by the buyer if the property is purchased from the government, purchased from the international and diplomatic agency and personnel and purchased from financial institutions and other agency through public auction.”
Ugyen Namgay said that if the buyer should pay the tax as mentioned in the section, the buyer is at loss because the government and the authorities concerned fixes the price at the public auction rate and have nothing to lose.
If the buyer has to pay the tax, it is unfair, he added.
Members also pointed out that the name of the Bill should be changed or deliberated in the next session. Ugyen Namgay said the current Bill only covered property transfer tax, which is not the only tax in the Bill. “It might cause inconvenience in the future while implementing because the current Bill is not inclusive of other property taxes.”
NC’s Chukha Member, Sangay Dorji said: “Property transfer tax is a portion of the Bill but during the deliberation, only property transfer tax is amended. The House can deliberate on the Bill after six months while amending the other property taxes. Until then, the time can be given as a grace period for people to clear the unpaid taxes.”