The Public Accounts Committee pointed out that the Bhutan Integrated Taxation System, or BITS 1.0, resulted in wasteful and avoidable expenditure of public funds. This is due to lapses in planning, procurement, and implementation. Presenting the committee’s findings during the Joint Sitting today, the committee said the project’s failure incurred losses in millions of ngultrum.
The Bhutan Integrated Taxation System (BITS) project was initiated by the finance ministry to modernise Bhutan’s tax administration and support the implementation of Goods and Services Tax (GST).
The project was aimed to automate key taxation functions including taxpayer registration, tax return processing, payment management and revenue reporting.
However, chairperson of the Public Accounts Committee, Jamyang Namgyal (PhD) said that the Royal Audit Authority’s Special Audit Report on BITS found serious weaknesses in procurement governance, project planning, and implementation oversight.
“The contract worth Nu 610.11 M was directly awarded to Thimphu Tech Park Limited under DHI without open competitive bidding. The special audit of RAA also found that evaluation criteria for selecting the TTPL’s international implementation partner were revised without proper documentation by themselves.”
The report stated that the direct award of a high-value contract without competitive procurement reduced transparency and limited assurance of value for money.
In addition, the chairperson said that advance payments exceeding regulatory limits were released without adequate financial guarantees, contributing to a direct financial loss of more than Nu 119 M.
The contract was subsequently terminated in April 2022.
According to audit findings, despite earlier assurances, most system components developed under BITS 1.0 could not be reused in BITS 2.0 due to different systems.
Jamyang Namgyal (PhD), Chairperson of Public Accounts Committee said, “As the BITS 1.0 was not successful, an additional Nu 60.12 M was spent for the development of the Bhutan Integrated Revenue Management System (BIRMS), which was to be integrated with BITS. Then, for the BITS 2.0, which is currently used for GST, it costed Nu 939.63 M.”
The Joint Sitting will continue deliberating on Reports of the Public Accounts Committee including the Royal Audit Authority’s Special Audit on BITS on Monday.
Kelzang Chhophyel
