Cable TV operators with limited subscribers in small towns could get a tax breather when the Goods and Services Tax Act is implemented. The Finance Ministry wrote this in response to a question from Lamgong-Wangchang MP of Paro in the National Assembly. Finance Minister Lekey Dorji also wrote about the need for responsible fiscal management before considering tax cuts or payout hikes to meet the goal of raising the country’s tax-to-GDP ratio to 15 per cent in the 13th Five-Year Plan.
The Member of Parliament from Lamgong-Wangchang has urged the Finance Minister to consider removing the sales tax on cable TV as part of the upcoming tax amendments.
Highlighting the shift of community antenna television from entertainment to an essential utility, the MP pointed out that services such as water, electricity, internet, and mobile communication are exempt from sales taxes, unlike cable TV.
The MP also noted that the previous government had already waived sales taxes on movie tickets and telecommunications, making a case for similar relief for cable TV users.
The Finance Minister clarified that the Sales Tax on cable TV connections is minimal, amounting to approximately Nu 69 per connection, and does not burden service providers as the tax is passed on to subscribers.
He added that during the upgrade from analogue to digital cable services, the government facilitated the transition by exempting Sales Tax and Customs Duty on essential digitalization equipment.
The minister urged businesses to recognize the significant support extended by the government, rather than focusing solely on seeking further tax exemptions or waivers.
Regarding the applicability of GST on cable services, the minister stated that it would depend on the turnover of service providers.
If a provider’s turnover exceeds the Nu 5 M threshold, GST will apply regardless of the location of its service recipients.
He also highlighted the broader fiscal challenges, noting that the 13th Five-Year Plan has an outlay of more than Nu 512bn with a fiscal deficit of more than Nu 55bn.
Samten Dolkar
Edited by Phub Gyem
