Today, the National Assembly unanimously agreed to do away with the Sales Tax on tobacco and tobacco products. The government introduced the Tax Bill of Bhutan 2021 for the tax revision as an interim measure to prevent the spread of COVID-19. It was found that most cases in relation to the breach of COVID-19 protocols in the areas along the Southern border were the results of the black market and smuggling of tobacco and tobacco products.
Today, an individual importing tobacco from India has to pay 100 per cent Sales Tax. And an additional 100 per cent customs tax is imposed if a person brings in tobacco and tobacco products from third countries. A few members of parliament recommended doing away with customs duty along with the sales tax.
However, the finance minister said that doing away with the customs duty will encourage more people to use tobacco products.
“Bhutanese use tobacco products from India and It is from there that they smuggle. The only way to import these tobacco products from third countries is either through ship or air. Tobacco is never brought in the ship because ship brings in only big consignments. By air, people bring it only for self-consumption. That’s why we feel we shouldn’t touch the customs duty. It has never affected us,” said the finance minister Namgay Tshering.
The minister added that the Bill however will expire in July next year with the implementation of the Goods and Services Tax Act.
As per Section 46(B) of the Public Finance Amendment Act of Bhutan 2012, “The imposition or increase of any tax or abolition, reduction or remission of any existing tax once passed as law by Parliament, shall be applied retroactively from the date it was initially tabled in the National Assembly”. Going by this, the Tax Bill commenced from Tuesday when the finance minister presented it in the National Assembly. However, the finance minister said that the commencement date of the Tax Bill of Bhutan should go along with the Tobacco Control (Amendment) Bill of Bhutan 2021. Tobacco Control (Amendment) Bill will be deliberated in the National Council.
Samten Dolkar / Sonam Tenzin /Pema Seldon Tshering
