1 TRANSLATION OF THE PROCEEDINGS AND ... - APFA News

egistered under the Companies Act, endorsed in an earlier session of the
Assembly, as well as companies or legal entities meeting certain specific
conditions are liable to this form of tax. Second, small business such as shops,
transport or contractual businesses etc. are liable to business income tax. Third,
liability to the personal income tax is on all Bhutanese people.
The Minister informed the Assembly that corporate and business income tax
have been started quite sometime ago and has been implemented for many years
without causing any undue burden or problem to any one. However, the
Personal Income Tax (PIT) is being introduced in Bhutan for the first time and
as there have already been some criticism and hesitation about it, copies of the
Act have been distributed from last year in order to give time for the
representatives to discuss with the people and thereafter deliberate upon the Act
in the present session of the Assembly.
The Minister pointed out that although the personal income tax is generally
thought of as something new, apart form the terminology, it is actually not very
different from the traditional practice of woola etc. which were prevalent in
Bhutan and was levied in accordance to the household income levels. Except in
one or two countries in the world, personal income tax is a universally accepted
and practiced form of taxation and in most countries PIT is the main form of
internal revenue. PIT in Bhutan has been discussed a few years earlier but has
been delayed due to the lack of a legal framework and also during the
celebration of the coronation silver jubilee, His Majesty the King commanded
that the personal income tax be postponed for a while.
Out of concern that the system of PIT may be further delayed, the necessary tax
officials and manpower needs as well as the basic office setup has already been
seen to in the Ministry of Finance. Further, the new tax has been widely
discussed with civil servants, businesspersons and others and it is evident that
the introduction of this tax would not cause much problems or difficulties.
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