KINLEY KHANDU CHODEN | Thimphu
Finance minister Lekey Dorji informed the National Assembly on May 25 during the presentation of the Action Taken Report, that the government is reviewing property tax concession measures for landowners in development-restricted areas surrounding Local Area Plans (LAPs) in Bumthang.
The issue was raised during deliberations on the implementation of tax concessions for residents whose land falls within designated no-development zones in parts of Bumthang.
The Choekhor_Tang MP Kuenzang Thinley highlighted that several landowners in the affected areas have continued paying property taxes despite restrictions on development imposed under local planning regulations.
Presenting the report, Lyonpo Lekey Dorji said the Property Tax Act provides a 90 percent concession for landowners in officially recognised development-restricted areas. However, he noted that complications have emerged in Bumthang as certain plots fall outside formally approved planning boundaries, making it difficult to extend the concession uniformly.
According to the finance minister, the absence of officially designated districts and clearly demarcated planning boundaries has delayed the implementation of the tax relief for some affected landowners.
To address this issue, the Ministry of Finance has instructed the Bumthang Dzongkhag Administration, in coordination with the Department of Human Settlement, to identify and confirm districts and planning boundaries.
He added that once these areas are formally designated as development-restricted zones under approved planning frameworks, eligible landowners would be able to access the 90 percent property tax concession provided under the Property Tax Act.
During the deliberations, MP Kuenzang Thinley said the situation in Bumthang differs from the general tax concession framework applied in other parts of the country.
The MP explained that Bumthang town is divided into three townships, which includes Dekiling, Chamkhar, and Jalikha, and said that the current issue affects 228 thram holders in Dekiling alone.
He further stated that the affected stretch runs from Jambay Lhakhang to Kurjey Lhakhang, where landowners have continued paying property taxes despite their land being located within development-restricted areas. He described the situation as an implementation gap rather than a policy flaw.
MP Kuenzang Thinley questioned whether the government would be able to resolve the matter by 2027, so that affected residents could begin receiving the tax concession as intended under the law.
In response, Minister for Infrastructure and Transport, Lyonpo Chandra Bdr Gurung said the Ministry of Infrastructure and Transport and the Ministry of Finance are working jointly to resolve the issue and ensure proper alignment between planning frameworks and tax policies.
Finance Minister Lekey Dorji also acknowledged broader challenges in the implementation of the Bumthang Valley Structural Plan and the Local Area Plan, noting that these challenges have contributed to delays in resolving taxation and land-use issues in the region.
He said coordination between relevant agencies is ongoing to ensure that planning boundaries are properly defined and that eligible landowners are not unfairly excluded from tax benefits due to administrative and technical gaps.
The matter has drawn increasing attention in the National Assembly, with residents in affected areas continuing to seek clarity on whether their properties qualify for tax relief under the existing legal framework. Lawmakers said the delay has created uncertainty among landowners who remain subject to full taxation despite planning restrictions on development.
Deputy Speaker Sangay Khandu directed the Ministry of Finance to report back to the House during the winter session on the progress of implementation and the status of resolving the issue for affected landowners in Bumthang.
