Druk Holding and Investments is expecting the government to do away with double taxation, since the Income Tax Act of 2001 in the process of being revised. DHI has been requesting the government since 2010.
Taxes are levied, both at the subsidiary and the holding level, leaving the Druk Holding investment with limited reserves to make investments.
“We have been discussing with the Ministry of Finance and making efforts to resolve the issue,” said DHI’s Officiating CEO, Damber S. Kharka.
He said if the double taxation is removed at the holding company level, they will have more profits built. “We can also pay more dividends to the government. We will also be able to build more reserves and that way we can invest in many other new business opportunities.”
Officials from the Druk Holding and Investments explained that the same income source was taxed at the sub-subsidiary level, subsidiary level, and at the holding level. For instance, the Dagachhu Hydropower Project pays tax to the government, and then declares its dividend to Druk Green Power Corporation.
The Druk Green Power Corporation then pays tax to the government and declares dividends to DHI, which in turn pays both its taxes, and dividends to the government.
Damber Singh Kharka said, it was in the larger interest of the economy if the issue is resolved at the soonest.
