The National Assembly through majority endorsed the government’s proposal to reduce Corporate Income Tax for the private companies from 30 per cent to 25 per cent. This was decided during the third reading on Income Tax (Amendment) Bill of Bhutan 2020 today.
As per the new section after section 45.1 of chapter 9, The rate of Income Tax for companies other than the State Enterprise under full tax liability shall be 25 per cent of the net profit.
According to the Finance Minister, the main objective of reducing Corporate Income Tax is to promote the growth of private companies in the country.
“There is a kind of undocumented allegations from the private sector that state-owned enterprises are posing more challenge to the private sector growth, hence we are proposing to grant tax cut by 5 per cent for the private companies. At the same time, the government is also expecting that with this tax cut there will be an increased investment within the companies. When there is an increase in investment then there definitely will be increased opportunity for employment generations,” said Namgay Tshering, the Finance Minister.
He added the tax cut will also encourage the private companies to look into the welfare of its employees.
“Of course, employees are well paid at this point of time but at the same time I think the only help the government can render to the private companies is through this conducive fiscal support and the government is expecting that with this tax cut, this will definitely help the companies in terms of the salary revisions for the employees working in the private companies,” Lyonpo added.
Currently, there are 385 private listed companies in the country.
Pema Seldon Tshering
