Transport: The procedure and formalities required to transfer taxi ownership restricts taxi operators to register with the Road Safety and Transport Authority (RSTA) to obtain Taxi Operating Permit (TOP).
With only a week to the deadline, less than half of 3,874 registered taxi owners in the country have registered with the RSTA for processing of TOP. Some 1,360 taxi owners have registered with the RSTA as of yesterday.
Despite the authority’s announcement made from July 3 to 7 over the national TV and radio requesting concerned taxi operators to register within September 30, a few reported to the authority.
The RSTA, therefore, once again notified to all taxi operators to report to the nearest RSTA offices and register for TOP within October 15 with necessary documents.
The notification says that those reporting after October 15 but before October 31 will be imposed Nu 3,000 as late fine. Thereafter, TOP will not be issued and the taxi shall be converted to private vehicle.
Some of the taxi drivers said they were not clear about the authority’s announcement while most of them said they were not aware of the notification.
RSTA’s chief transport officer and spokesperson, Karma Pemba, said that the authority again notified in the media and also instructed the regional transport officers (RTO) to inform the respective taxi representatives so that all are informed.
A taxi driver, Rinchen, said that not all taxi drivers watch TV or read newspapers. The best way could be to inform the taxi representatives, who then will inform all the drivers.
TOP will be issued to a Bhutanese taxi owners holding valid taxi driving licence who intend to operate an existing taxi or a new taxi in locations other than Thimphu and Phuentsholing because new taxi registration in the two locations has been suspended.
However, not all the registered taxi owners will be issued TOP. The permit will not be issued to current taxi owners who are civil servants and corporate or project employees and also to person who were operating hired taxis before July.
Nevertheless, they will be allowed to operate the current taxi without TOP till completion of the nine years life span of the taxi.
A taxi owner can hire his taxi to a holder of a person with taxi driving licence temporarily only if the owner has a genuine reason for not being able to operate taxi himself or herself.
A taxi driver, Jamtsho, said that RSTA coming up with such rules suddenly is a hassle for those drivers who don’t have vehicle ownership in their name. He paid transfer tax of Nu 15,870 to change the ownership of the taxi that he bought from a friend to obtain the permit.
“When the authority makes such rules, we don’t have a choice. Otherwise, we will be fined,” said Jamtsho. “If certain amount is fixed as transfer tax irrespective of vehicle model then it would be fair.”
However, Karma Pemba said that transfer tax is imposed according to the taxation rule of the country. The government makes rules and regulations and it is the authority’s duty to implement it.
“We have given a deadline so that the drivers come forward to register, not to impose penalty,” said Karma Pemba.
According to the RSTA’s transfer of ownership rules, a five percent vehicle ownership transfer tax is imposed on the depreciated value of a vehicle.
The authority follows diminishing balance method of depreciation on the initial purchase price on production of original invoice/bill or similar maintained by the authority or the current market value of similar type. The depreciation rates are 10 percent per annum for the first and second year, and 15 percent for third, fourth, fifth and sixth year.
For instance, if the original cost of a vehicle is Nu 200,000 and the vehicle is sold within the first year of its purchase then 10 percent depreciation is charged on Nu 200,000 and five percent transfer tax is imposed on Nu 180,000 (Nu 9,000).
A motor vehicle is valued at 10 percent of the initial purchase price as indicated in the original invoice/bill, or similar records maintained by the authority or the current purchase price of a new vehicle of the same or similar description, after the sixth year.
Rinchen said that most of the drivers are reluctant to transfer ownership of taxi because of the tax. They wait for the vehicle to be more than six years old so that less tax is imposed.
“We did request the authority to reduce the transfer tax but the authority says it should go by the Act,” said Rinchen. “I wonder if the Act can be amended for public’s convenience.”
According to transfer of ownership rules, a person selling the vehicle must inform and request the authority to transfer the ownership in the name of the person buying the vehicle within 15 days of sale.
Another taxi driver, Tandin, said that the seller had mortgaged his vehicle with a financial institution and, to change the ownership, he needs to get a clearance certificate from the financial institution stating that the loan on the vehicle has either been fully paid or that the financier has no objection to the transfer of the loan along with the transfer of the vehicle ownership.
“It takes time to transfer the loan to my name and I will not be able to transfer the ownership and register within the given date,” said Tandin. “I informed RSTA official about it and they asked me to clear the loan.”
He added that if he had the money to clear the loan, he will not be driving taxi.
The permit will also not be issued to those individuals convicted by the law and to a person whose taxi driving licence has been cancelled for traffic violation.