Rajesh Rai  | Phuentsholing     

Those operating micro and small businesses in Phuentsholing Thromde say that the pandemic has caused huge losses to their businesses and the government should to extend tax exemptions.

The finance ministry exempted the Business Income Tax (BIT) for small and micro-businesses located and operating outside four dzongkhag thromdes and dzongkhag throms last week. Phuentsholing shopkeepers being in the class A thromde would not be eligible for the exemptions.

Shopkeepers say the movement restrictions during the two nationwide lockdowns have reduced their business drastically since the number of visitors to the town slumped, and payment of house rents without businesses have hit their businesses hard.

One grocery owner, Kelzang Thinley said, “Although it is good the government has done away with the tax to the rural businesses, our businesses are equally affected.”

Usually, the business in Phuentsholing was doing well. He also said there were many costs while importing, which worsened the already poor business.

Another shopkeeper, Sujata Chhetri said there were some businesses that were not much affected.

“But for us, small ones, even paying the rent has been difficult,” she said. “And there are many small and micro-businesses in the town.”

She said the problem is the same with shops within thromde and outside thromdes.

A restaurant owner, Amrit Tamang said that it is unfair that some are given tax exemption and others are not.

“Most shops in the thromde have remained closed,” he said.

He said that instead, shops outside thromde were operating better this time.

“It would be better to give tax exemption to all small businesses in the country. Otherwise, don’t give to any.”

The proprietor of packaging and carry bags manufacturing (small) company in Pasakha, Karma Namgyel was uncertain how the tax would impact his business.

“I haven’t yet finished closing the accounts,” he said, adding that his company most likely incurred loss, which means he need not pay taxes.

Karma Namgyel said that his company started only in January 2020 and went into production for just two months. There is no sale at all, he added.

The Bhutan Chamber of Commerce and Industry’s regional secretary in Phuentsholing, Sangay Dorji said if the exemption was provided because of the pandemic, then micro and small businesses in Phuentsholing have been equally affected.

“A few cottage industries have completely shut down as well due to labour shortage,” he said. 

“The new startups have also been affected.”

He said that the exemption would help them too.

Meanwhile, this exemption of the tax for micro and small businesses mostly in the rural areas will be applicable until December 31, 2024.

There are more than 23,000 registered small and micro-businesses in the country, of which 12,400 are in rural areas.