No duty-free quota privilege from 2023

Prime Minister Dasho Dr. Lotay Tshering presents the State of the Nation report to the Parliament on 8 December

However, the privileges will continue for diplomats

LHAKPA TSHERING | Thimphu

The government has decided to withdraw the duty-free quota facility granted to privileged individuals from next year following the loss of revenue from this reservation.

This was what Prime Minister Dasho Dr. Lotay Tshering said while presenting the state of the nation report at the recently concluded parliament session on 8 December.

During the 132nd Lhengye Zhungtshog held on 29 November, the Cabinet passed the finance ministry proposal for the withdrawal of the entitlement of duty-free memberships.

The withdrawal, according to the report, was made following the review that found the differentiated handouts were seen to be misused, deflecting from their intended purposes. The membership had also proliferated over the years leading to loss of revenue.

These reservations have also been dropped given the goods that are available in the duty-free shops are now adequately available in the open market with the steady growth of the economy.

However, the privileges will continue to be given to diplomats in accordance with the obligation under relevant international laws, conventions, and covenants ratified by the Parliament of Bhutan and bilateral and multilateral agreement signed by the government.

On this front, the cabinet has directed the finance ministry to coordinate with the foreign affairs ministry for the privileges for the diplomats.

These shopping privileges are entitled to executives and specialists of civil servants, cabinet ministers and the members of parliament, drangpoens, arms force personnel above the rank of Lt. Colonel, head of constitutional office and attorney general, heads of the international agency, and chairperson of the royal privy council.

Five eminent Lopens of Zhung Dratshang, the highest personal income taxpayers, Indian military officers (IMTART and GREF), and honorary consuls of foreign countries are also entitled to duty-free shopping at duty-free shops.

The duty-free shops were started in the 1990s to provide access to consumer goods of third-world origin and selected local products, support the tourism sector in the country, operate as an enterprise commercially, and provide a source of foreign exchange and revenue to the government.