28/08/2024
Now DNT has released their statement on vehicle tax. Now have individual opinion la
๐๐ซ๐๐ฌ๐ฌ ๐๐๐ฅ๐๐๐ฌ๐
๐๐ง ๐ฏ๐๐ก๐ข๐๐ฅ๐ ๐ฉ๐ซ๐ข๐๐ ๐ก๐ข๐ค๐ ๐๐ง๐ ๐ญ๐๐ฑ ๐ซ๐๐ฏ๐ข๐ฌ๐ข๐จ๐ง
๐๐ฎ๐ ๐ฎ๐ฌ๐ญ ๐๐, ๐๐๐๐
With sincere greetings to everyone, we would like to take an opportunity to share our thoughts on the recent discussions around the substantial hike in vehicle prices, understandably impacting many prospective buyers.
The increased rates of the imported cars, which came into light after the lifting of vehicle import moratorium about 10 days ago, is attributed to the amendment of the Tax Bill in 2022. There were also frequent references to the previous government, one led by Druk Nyamrup Tshogpa (DNT), during which the amendment was carried out.
As much as the facts are clear, it will be irresponsible on the part of the DNT to brush aside the developments. Therefore, while acknowledging every word and every concern expressed around the topic on numerous platforms, we would like to present some details as well.
1. In a journey of a nation, there are highs and lows, and it is for the generation of the time to rise above the challenges. The recent years, especially coinciding with the tenure of the DNT government, were true test of time. We lived through crises that threatened both lives and livelihood like never before.
We had a country to save from health crises first, followed by economic disasters. In our service from the heart, inevitable decisions had to be made in the context of time and circumstances. It is not in our principles to pull political stunts, let alone try during such adversities. Of course, thankfully, we perched on the gracious pillar of support His Majesty The King provided us with.
2. As an import driven country, the pandemic bruised economy and Russia-Ukraine war had direct impact on the cost of living. Ironically, imports increased and that had huge consequences on our already pandemic-weakened foreign reserve.
Caught between the devil and the sea, we were left with fast depleting foreign reserve on one hand and ballooning trade deficit on the other. Imposing moratoriums or discouraging import of non-essential items until our macroeconomic situation improved, were some of the solutions we had to choose.
3. Thus the embargo on vehicle import and the Tax Bill amendment in 2022 came about. Talking about the tax revision, the DNT government had always believed in professionalising our taxation system, and it did not always mean upward revision. Taxes on essential items were always revised downward as counter policy measures.
Redundant practices were either done away with or redefined to match the reality today. For instance, Personal Income Tax exemption threshold was enhanced, tax on cash crops were waived off, Business Income Tax for small and micro businesses in rural areas were totally exempted, and Corporate Income Tax for private companies were reduced.
In keeping with the nationโs vision to pursue green growth, we reduced tax on hybrid vehicles by 50 percent, on all sales, customs and green taxes. Electric cars were brought down to zero tax. Recognising the importance of digital competency, tax on mobile phones were exempted and energy saving devices made tax-free.
These are a few examples.
4. With the tax revision playing up the cost of vehicles today, while increase in production, transportation and foreign exchange rates have also added to the amount, we understand the prevailing public sentiments.
In response, we have read that the government is reviewing and will even โinvestigateโ the vehicle prices and taxes on it. Taxes come in as โmoney billโ to the Parliament, which can be endorsed in the same session. It is only reasonable that the government of the day study the dynamics and make necessary changes based on the prevailing economic situation.
This also leads us to think whether same investigation could have been carried out before the lifting of the vehicle moratorium.
5. The DNT has always believed that progressive taxations are a necessity to a countryโs growth and delivery of public services.
For example, the revision of property tax that we, as government, painfully brought about saw close to 1,000 percent increase in the revenue collection. The amount will now be channelled back to infrastructure and service delivery, mostly to rural areas that need more capital injection.
Similarly, we hope the present government and all successive governments will view the taxation system of the country through the lens of nation building and not through glasses of the populist. We have also lost enough time in looking back and blaming the past. This was never a part of the DNTโs game.
Instead, we look forward to moving ahead together as one nation. We served the nation with best of intentions during our time. We pray the present government will do too!
Best Wishes
Druk Nyamrup Tshogpa
