English | Dzongkha Friday, September 25, 2020

Implementing the 4 sections of GST Bill next year violates Public Finance Act, NC

Feb 14, 2020

The government’s decision to implement four sections of the Goods and Services Tax (GST) Bill of Bhutan 2020 within the 1st July of 2021 violates the Public Finance (Amendment) Act of Bhutan.

This was raised by the Members of the National Council when the Finance Minister presented the  GST Bill to the National Council this morning.

As per the Public Finance (Amendment) Act of Bhutan 2012, imposition or increase of any tax or abolition, reduction or remission of any existing tax once passed as law by the parliament shall be applied retroactively from the date it was initially tabled in the National Assembly.

The members of the house claimed the government’s decision to implement 4 Sections of the Bill by the 1st day of July 2021 is violating the Public Finance (Amendment) Act of Bhutan.

“The decision to implement four of its Section next year violates Section 46B of the Public Finance (Amendment) Act of Bhutan 2012. I would like to request the Bill to be postponed or dismiss it altogether. It would be better to deliberate on the Bill once everything is ready,” said Lhatu, the Member of Parliament (MP) of Trashigang.

“Since the date of implementation of the Bill is violating the Public Finance (Amendment) Act of Bhutan 2012, I would also suggest the same,” added Sangay Dorji, the Chhukha MP.

“I will recommend the Bill to be kept aside for a time being or what if we don’t consider it as a Money Bill. With that, we can deliberate on the matter extensively and meanwhile, the government can also finish all the ground works associated with the Bill,” suggested Ugyen Namgay, the Haa MP.

The Goods and Services Tax Bill of Bhutan 2020 was Introduced at the National Assembly on 16th January this year.

“Since GST Bill is a Money Bill, we have already agreed on the commencement date which will be from the day the Bill is tabled. However, the four sections in question will be implemented only next year and we know that its in violation of the Public Finance (Amendment) Act of Bhutan, but we should also be aware the suitability of this Act. Section 46(b) of the Public Finance Act came into force after the case of Vehicle import tax between the first Government and the Opposition. And since the case in question is on vehicle tax the Act is very applicable.

However, if the same rule of implementing the Bills/Acts retroactively from the date it’s tabled is applied to telecommunication tax revisions, the administrative burden would be near impossible. We have lots of Acts and Laws in place but many of it needs amendments with proper research. And I feel, it is high time for us to look upon various difficulties and problems associated with Acts and law when it comes to following them,” informed Namgay Tshering, the Finance Minister.

He further added the Implementation of Tax Act 2014 and the Taxes and Levies Act of Bhutan 2016 have also followed the same footsteps of violating the Public Finance (Amendment) Act of Bhutan 2012.

The Four sections to be implemented later are Accounting for GST, Payment of GST, Refund of net Amount and Registration. The National Assembly adopted the GST Bill of Bhutan 2020 with 34 Yes, 1 No and 8 Abstain out of 43 members yesterday.

Passang Dorji

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