The financial year (FY) 2016-17 saw a total tax revenue collection of Nu 21.7bn, 73% of the total revenue.
With increase in revenue from sales tax, excise duty and Corporate Income Tax (CIT), tax revenue increased by 8% from the previous year.
According to the annual revenue income 2016-17, the revenue under taxes on income, profit and capital gain has declined slightly by Nu 0.724mn from the previous year.
The decrease was attributed mostly from Personal Income Tax (PIT) due to tax measures.
Revenue from CIT was recorded at Nu 8.17bn, an increase of 9.5% from the previous year. Companies under manufacturing and service sectors like Bhutan Power Corporation Limited, Bhutan Telecom Limited and Army Welfare Project Limited performed well. The number of CIT filers for income year 2016 was 341. It contributed 27.5% to the total revenue.
Similarly revenue from Business Income Tax (BIT) was recorded at Nu 1.27bn. It was attributed mainly to better performance by the business units leading to an increase of 8.6%. Number of BIT filers for income year 2016 was 28,688. BIT contributed 4.3% to the total revenue.
The PIT was revised through “Revised Taxes and Levies Act of Bhutan 2016.” The revision of the PIT had impacted both the PIT collection and the number of PIT filers from income year 2016. During the income year 2015, a total of 71,559 individuals had filed PIT returns with the eight regional offices.
The report states that during the income year 2016, a total of 79,877 filers filed their PIT returns recording an increase in number of PIT filers by 8,318 filers. Although, the number of PIT filers should have reduced in 2016 with revision to basic exemption limit, the actual number of PIT filers increased since many filed their PIT returns to claim refund.
The PIT collection for the income year 2016 recorded a decline due to the revision. The gross collection was Nu 1.47bn and Nu 514.981mn was refunded to the PIT payers bringing the net collection to Nu 957.313mn. Due to the revision, the actual refund amount increased by Nu. 403.695 million in income year 2016 compared to income year 2015.
The total revenue foregone in the form of exemptions and tax holidays was Nu 4.40bn. Of this, total direct taxes constituted Nu 667.733mn in the form of CIT, BIT and PIT, while indirect taxes constituted Nu 3.7bn in the form of sales tax, customs duty, green tax and excise duty. Total foregone amount constituted 14.8% of the total revenue for the fiscal year.
The tax revenue is estimated to grow at 15% and non-tax revenue at 21.2%. The growth in tax revenue is mainly expected on account of royalty energy from hydropower plants, power tariff revision and tourism sectors. Growth in non-tax revenue is anticipated mainly account of remittances from Royal Monetary Authority.
Dechen Dolkar from Thimphu