Strom over revision of Taxes

Courtesy: Kuensel

The national assembly (NA) passed the 2010-11 budget yesterday, after a heated debate on whether the government had the authority to revise taxes, and the two opposition members not endorsing the budget.

On presenting the revised taxation policies, as part of the budget report, the finance minister, Lyonpo Wangdi Norbu, said that his presentation was only to inform the house of how the government planned to broaden the tax base. Existing tax legislation empowered the government to make changes in the levy of taxes, without the seeking parliament approval, he told the assembly.

This, the opposition leader, Tshering Tobgay, vehemently opposed saying that such a unilateral decision by the government went against the Constitution, as well as existing laws.

The opposition leader said that section 9 of the public finance act of Bhutan 2007 clearly stated that raising of revenues through taxes shall be authorised by parliament, and that section 14 (b) says that the finance minister shall be responsible to propose the taxation measures to parliament.

He also referred to section 14 (1) of the Constitution, which states that taxes, fees and other forms of levies shall not be imposed or altered except by law.

Tshering Tobgay also said that section 2 of the public finance act says it will supersede all laws that are inconsistent with its provisions, and therefore the public finance act should prevail over the sales, customs and excise act 2000.

“What the finance minister has done goes against the Constitution and existing laws and he should therefore resign,” said the opposition leader.

The speaker directed Chukha MP Ugay Tshering to go and cross check with ministry officials, if they had broken any law in revising the taxation polices.

He returned after 20 minutes to say that the finance ministry had done everything in line with existing laws.

Ugay Tshering quoted chapter 3 section 4.2 (part I) and section 6.1 (part II) of the sales tax, customs and excise act 2000, which states that fixation of the rates of sales tax and customs tariff and any revision thereof, and the range of commodities and services under the sales tax schedule shall be approved by the royal government of Bhutan.

The MP also said that three amendments proposed to the income tax act that was recently passed by the assembly was brought to parliament for approval, because it was inconsistent with the public finance act of Bhutan. “With regard to the sales tax, customs and excise act 2000, it isn’t inconsistent with the public finance act of Bhutan,” he said.

The opposition leader left the hall before the end of the budget report discussions, which hurried to a close, once the chapter on the rationalisation of taxes was done with.

By Phuntsho Wangdi