The finance minister, Namgay Dorji proposed to waive off tax on interests earned from fixed deposits while introducing Income Tax Bill of Bhutan 2016, in the National Assembly, today.
The Lower House resolved to discuss the proposal further following the majority of members expressing their support through a show of hands.
Both individual depositors and banks will stand to benefit if the government’s proposed tax waiver on interest earned from fixed deposits is approved by the parliament, according to the minister.
“We are trying to waive off the tax on interests earned through fixed deposits to encourage people to save more. When more people save, the banks will also benefit,” said Lyonpo Namgay Dorji.
Interests earned from fixed deposits are considered as individual income and taxed under the personal income tax.
The Income Tax Rule states an individual earning interest income over Nu 10,000 and above is to pay 5 percent of the total income interest to the government.
If the proposal gets through, the government is expected to lose Nu 43 M annually.
The Finance Committee will review the proposal and present it in the Assembly on November 28.
