The National Assembly today decided to do away with the 5% sales tax on all prepaid and postpaid telecom services users as recommended by the Economic and Finance Committee of the house. The committee made the recommendation as the house deliberated on the Tax (Amendment) Bill of Bhutan 2020 today.
The committee recommended that a 7 % sales tax shall be applicable only to tourist SIM and not for postpaid users. Earlier this month, the Finance Minister announced that the 5 % sales tax is waived off only for prepaid users and that 7 % tax will be imposed on postpaid and tourist SIM.
“If we can waive off the voucher tax on both the prepaid and postpaid, it will be easier for us to work in future. If we think the 5% voucher tax is contributing to the country’s economy, the amount is not very high. It would be also better to remove the 7% sales tax on postpaid services,” said Prime Minister Dr Lotay Tshering.
“I feel having the 5% voucher tax is a double tax. Tashi Cell and Bhutan Telecom have been providing a separate tax and on
top of that when people avail their services they are made to pay a separate tax. It is a double tax. That’s why the government is supporting the initiative to wave off the 5% tax,” added Finance Minister Namgay Tshering.
The house decided the do away with the 5 % sales tax on all prepaid and postpaid users with the majority of the members voting in favour of the recommendation.
According to the Department of Revenue and Customs, the revenue earned from telecommunication services on voucher tax averages ngultrum 200 million annually. For now, Bhutan Telecom and Tashi Cell have over 715,000 prepaid users and more than 16000 postpaid users.
Kinley Dem/Passang Dorji
