The government’s proposal to introduce a uniform 10 per cent Customs Duty on all goods imported from third countries saw disagreement from the Opposition Party today. The Opposition says this revision will make the country import-dependent and affect both the Small and Medium Enterprises (SME), and Cottage and Small Industries.
The Finance Ministry last week proposed to standardise Customs Duty to 10 per cent on all goods imported from third countries excluding alcohol, tobacco products and vehicles. The revision was aimed at increasing tax payment compliance, reduce inflation and make varieties of products available for consumers.
However, during the third reading of the Customs (Amendment) Bill of Bhutan 2021, members of the opposition shared their concerns that this revision will affect the country’s economic sovereignty and risk domestic industries from foreign competition.
“Imports of good will become easy. So people will import all kinds of goods irrespective of our need. When we revise Customs Duty to 10%, economists say this will affect SMEs in our country,” said Opposition Leader Dorji Wangdi.
“When we keep the Customs Duty minimal, international studies have found that the country imports more and become a junkyard. This will lead to unmindful consumptions. And also when we import more, our convertible currency will flow outside,” added Passang Dorji (PhD), the member of parliament of Bartsham Shongphu.
Meanwhile, some of the members said revising Customs Duty to a uniform 10 % will in fact create opportunities for various businesses in the country.
“The demand in the country will not increase. If there isn’t any demand, businessmen will not import. We think that the imported goods will give a competition to our local products, so we have increased the tax and for the last 10 years, increase in tax has only benefitted the shopkeepers. This has not helped the consumers and has not reduced the imports,” said Finance Minister Namgay Tshering.
“Whether it’s CSI or SME, there are only a few industries that manufactured goods with our raw material and export it to our country. Whether it’s packaging materials or raw materials, we always import them. The revised duty will help them. We can always protect our locally manufactured goods. We have to depend on raw materials from outside, so we need to think about it as well,” said Economic Affairs Minister Loknath Sharma.
“People think there is corruption amongst taxpayers and collectors. There is not trust amongst themselves. Until today, we have been importing only from India and whether the goods are of quality or not, we don’t have much choice. Because the goods from third countries that are of better quality, we have to pay high tax. So, Bhutan rarely gets quality products,” added Kinley Wangchuk, the Chairperson of the Economics and Finance Committee in the National Assembly.
The House directed the Economics and Finance Committee to revisit the Bill and report to the House tomorrow.
Sangay Chezom/Sonam Tenzin/Samten Dolkar
