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

Therefore, it is being submitted to the National Assembly for endorsement after
reviewing and charging whatever is felt necessary.
The Minister pointed out that as the country develops, PIT would become the
most important category of income tax. Therefore, if the PIT can be initiated,
whatever constraints in relation to tax are being faced at present can be
addressed and the national development efforts can be undertaken comfortably.
This is the main purpose of initiating the personal income tax.
The Minister said that above all, the main policy objective of the Royal
Government is the achievement of national self-reliance and personal income
tax can contribute significantly towards it. For instance, the total internal
revenue of Nu. 4,613 million can only meet 46% of the total expenditure,
basically just meeting the recurrent expenditure. As the internal revenue cannot
cover capital expenditure finances amounting to approximately 54% to 60% of
the total public expenditure has to be mobilized from outside the country.
Therefore the aspiration of self-reliance remains mere rhetoric and not a reality.
In the past, the Bhutanese were not able to pay PIT, as incomes were low. But
today, thanks to the Royal Government, people have benefited from the
development and it is important that all the citizens contribute as per the
individual’s capacity, towards the nation’s security and development.
The Minister informed the Assembly that even in the donor countries, essential
services are not provided free of charge and in fact the citizens are liable to high
tax rates, PIT being anywhere between 50 to 60%. Although Bhutan is not a
wealthy country, up to now Bhutanese are among the least taxed people in the
world. In addition, the government through financial resources mobilized from
donors continues to provide essential services free of cost to the people with the
government bearing the entire burden. The Minister explained that in view of
the national policy of self-reliance and the steady pace of development in the
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