The finance minister, Namgay Dorji proposed in the National Assembly today, to increase tax-free Personal Income Tax slab from Nu 100,000 to 200,000.
Income Tax Act says an individual will have to file in PIT if their annual income exceeds Nu100,000.
Those earning an income between Nu 100,001-250,000 are charged 10 percent tax.
The percentage keeps increasing as the income amount increases.
Lyonpo said the present tax slab was agreed upon in 2001 and that it has been almost 14 years since it was last revised.
He said given the economic condition, inflation, monetary value, and international rules and regulation, it is about time to look into it.
“Even in SAARC countries, PIT slab is reviewed, annually.”
He cited examples of Bhutan’s neighboring countries.
India’s tax-free PIT slab is more than Nu 150,000, Bangladesh, 250,000 and Nepal, 250,000, as well.
The minister also proposed to exempt taxes on import of machinery for manufacturing medicinal herbs and books.
“We say medical services are free but we impose taxes on machines needed to manufacture them. It is against the national objective.”
Lyonpo said taxes on import of books must also be exempted to fulfill the national objective of advancing education.
The decision will be made after a thorough discussion by the committee in coming weeks.
