Most NC members say tourism levy exemption should be foregone

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With the Finance Minister introducing the Tourism Levy Exemption Bill of Bhutan 2020 in the National Council on February 6, it was deliberated that international and regional tourists shall be liable to pay tourism levy of US$ 65 and Nu 1200 respectively per night halt termed as sustainable development fees (SDF) which is 25% of the tourism levy on international tourists, while a regional tourist visiting 11 selected Dzongkhags would be exempted from the levy.

When it comes to exemption of tourism levy, majority of NC members did not support the tourism levy exemption depending on their take on the development or state of their respective dzongkhags. Most of the MPs were of the opinion that instead of tourism levy exemption, better facilities and services should be provided to the tourists.

The Finance Minister said that tourism industry was considered a source of development for a country. The bill seeks to exempt levy on regional tourists visiting the six eastern Dzongkhags which was understood before and now an additional five Dzongkhags: Dagana, Tsirang, Trongsa, Sarpang and Zhemgang will be considered for the exemption.

The exemption aims to improve tourism growth in the Dzongkhags that receive less number of tourists.  According to the bill, tourism levy exemption shall expired by December 31, 2024.

The majority of MP members raised their concerns about equitable distribution of benefits whereby Paro MP Ugyen Tshering said that adding the six Dzongkhags with five other Dzongkhags for SDF levy is a good policy. However he questioned that in the four western Dzongkhags (Thimphu, Paro, Punakha and Wangdue) there are more hotels for tourists with loan from banks. Due to the outbreak of Corona virus tourist arrivals in the country would be affected causing loss for the hotels. He asked what the government was going to do about the issue.

Haa MP Ugyen Namgay said that with the regional tourist arrivals, profit amounted to around Nu 933mn. With the decrease of SDF for 11 Dzongkhags, he said that there might be budget deficit. He added that some Dzongkhags are left without tourists at all and some places are frequently visited by tourists. “How can Samtse and Haa Dzongkhag be left behind?  Is there a solution for these two dzongkhags to be included as tourist sites?” he asked.

Finance minister responded that it would be difficult to accommodate a huge number of tourists with limited infrastructure that is why the tourism levy of Nu1,200 is in place.” There are 206 hotels registered in a country and 50 are in Thimphu.   “If the tourists visit the 11 Dzongkhags that have been identified as tourist destination Dzongkhags through Samtse and Chukha Dzongkhags, it will benefit a whole lot of communities.”

Moreover, the government is preparing to impose green tax on foreign vehicles carrying regional tourists in Bhutan. Regional tourists coming in foreign vehicles should hire local vehicles for sightseeing purpose paying Nu 1,200 per day as green tax but at the same time they are allowed to use their vehicles to travel from one hotel to another. As an alternative, they can use foreign vehicle without hiring local vehicles for sightseeing with the charge of a 4,500 per day. However the policy is not yet implemented.

Bumthang MP Nima said that exemption of tax is not important but facilities should be improved. “Bumthang is located in the central region, it is not a part of the exempted Dzongkhags and it has impact on hoteliers as they mainly depend on tourists,” he said. In addition, Sarpang MP said that due to limited facilities and services, arrival of tourists is less so there should be development to attract tourists. Further Punakha MP Lhaki Dolma said rather than exemption of tax, the tax should be imposed and through that the development of facilities and services should be made.

 While the House adopted most of the amendments proposed by the National Assembly on the Bill, the House directed the Committee to review the sections that were not decided during the in-house deliberation taking into consideration the view of the members and to prepare the Bill for final adoption.

Tenzin Lhamo fromThimphu

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