While works are on for a major tax reform, Prime Minister Dr Lotay Tshering did not have details on how and when it would come into effect.

“If we are to narrow the gap, it is time for the tax reform but I don’t have answer on when or how the government would reform the tax, as it requires lot of procedures,” Lyonchhen said. “I don’t have the power to increase the tax or nor am I an expert, as tax is a different subject.”

Lyonchhen said the government is still working on the luxury and inheritance taxes and is unsure when the government would implement the tax reforms.

NC member Karma Tshering questioned the Prime Minister on what were the redistributive tax measures the government would adopt to reduce the growing income and wealth and when would the government start the tax reform and institute luxury and inheritance taxes.

Lyonchhen said the government would try to institute luxury and inheritance taxes by the fourth session of the Parliament, as research on the tax measures and convincing people on tax reforms would take time. 

“Such a reform must be considered carefully. We would definitely not be able to start this year but we can at least try to initiate by next summer session.”

He said that the party came up with the slogan ‘narrowing the gap’ as a consequence of its consultations with the people and through research. “We are aiming to reduce the gap and not make everyone equal because the gap would always remain, no matter what.”

He said the country would graduate from a least developed country category, and after the graduation, the economy should be stable to benefit the people, which is why the government came up with the vision of narrowing the gap.

Lyonchhen added that other political parties might not show interest in the tax reforms or increase tax because such moves would not be popular with the voters. Despite that, Druk Nyamrup Tshogpa would continue to work on tax reforms, as it is very important and it was time some taxes are reformed.

For instance, Lyonchhen said a sales tax of 30 percent is levied on beer from the manufacturer but the shopkeeper applies another 10 percent tax on retail price and the customer land up paying extra price, which is a loss for them.

“These are some of the loopholes and nothing has been done,” Lyonchhen said. “Some land taxes are paid equally irrespective of its location and values.”

Lyonchhen said there are lots of gaps when it comes to minerals, which are nation’s jewels and it should be taxed more and when it comes to inheritance and business that are developed by the people’s own idea should be taxed less.

“Government would support private business and enterprising individuals by creating business opportunities where we can collect tax from their income and use for the country’s developmental activities,” Lyonchhen said. “Government is also working on the goods and service tax, which is also our priority and definitely contribute to narrowing the gap.”

Yangchen C Rinzin