The Economic and Finance Committee’s suggestion to increase the sales tax on the import of Chicken and Pork was turned down by the National Assembly today. The motive that the committee presented to the House is to help local meat distributors sell their produce, ensure food and nutrition security, and maintain foreign currency reserves. The committee recommended further increasing the proposed sales tax on such imported meat items from 20 to 40%.
Indicating that the country can produce enough chicken and pork items now, the economic and finance committee proposed to increase the sales tax on these meat items to 40%. The government in the Tax Bill of Bhutan 2022 initially proposed to increase the sales tax to 20%.
“The reason behind us suggesting to increase the sales tax of imported chicken and pork is because we think we have enough distributors in the country to supply such meat items,” said the Chairperson of the Economic and Finance Committee, Kinga Penjor.
While the members commended the motive behind it, they also shared their concerns.
“The committee’s suggestion to increase the sales tax to 40% will benefit the local meat producers. I have been saying this a lot, there are a lot of challenges in maintaining food security. Maintaining a reliable supply chain is also a major challenge,” said Agriculture Minister Yeshey Penjor.
“It will be very difficult to achieve the local meat demand if we increase the sales tax and our local meat producers cannot meet its demand. This might lead to inflation and the general public will be affected badly,” said the Bartsham-Shongphu MP, Passang Dorji (PhD).
“If we further increase the sales tax, prices of meat items in the local market will increase. With the limited supply of meat and high demand, prices of meat items will only increase. Consumers will be affected. That time, the government will be blamed for the price inflation,” said Finance Minister Namgay Tshering.
“Whether we increase the sales tax to 40 or 100% we cannot compete with other countries. Currently, be it meat or dairy products like milk, we are failing in value addition,” said Tshewang Lhamo, the Member of Parliament for Bongo-Chapcha.
After much deliberation, the House through a raise of hands decided to keep the government’s proposed sales tax of 20%. The House will continue its deliberations on other commodities tomorrow.
Passang Dorji, BBS
Edited by Yeshi Gyaltshen
