MoF: vehicle sales tax just speculative
20 September 2008
The sales tax on vehicles could depress places where there are hardly any cars. Allaying fears, the Finance Secretary said that the sales tax was just a speculation. “There is nothing going on for the car sale tax but we will do something later about it,” he said.
According to the RSTA, Thimphu has 22,032 vehicles, followed by Phuentsholing with 11,914 vehicles, Gelephu with 1,702 and Samdrup Jongkhar with 2,309 registered vehicles, as of June this year.
People living in rural regions are worried that their place will remain idle for ever without any development. “We have to walk for an hour on roads carrying potatoes to Trashigang town and we hardly see vehicles,” said Changlu, 41, from Bidung, Trashigang. Tandin, a businessman in Mongar, said that it will be unfair if the government imposes the sales tax on vehicles just because of traffic congestions in urban areas. “Out here, we can hardly find a vehicle, forget about parking fees,” he said.
For people living in rural areas, it is a dream to someday own a second-hand car. “If the government imposes sales tax then definitely even second-hand vehicles will become unaffordable,” Tandin added. The Agriculture Minister, Lyonpo initiated an unusual move for his ministry in the capital – a weekly walk to their offices, in a bid to reduce pollution and traffic congestion.
He said the initiative will also encourage the public to use public transport services. But, he said, there is need to improve public transport.
“About three to four vehicle loan transactions are done in a day,” said the Managing Director of BNBL. “The number of people applying for consumer loan is increasing,” said the Managing Director of BoBL. Consumer loans range from Nu 1.0 million to 2.0 million.
The BDFC’s Managing Director said that there have been no changes so far. “The old staff have cars and the new ones are not yet entitled for a vehicle loan,” he said.
“There is a slight increase in loan applicants right now,” said the General Manager of RICBL. The Ministry of Finance issued 226 quotas in 2006, 560 quotas in 2007 and 401 quotas so far this year.
Civil servants with the Position Classification System of P3 and above are entitled for quota every seven years. A Home Ministry employee said he sold his quota since he owned a car, “I had a financial crisis so I sold my quota for Nu 60,000 to a businessman who bought a Tucson with it,” he said.
“We don’t have any fixed life for private vehicles but for public services like taxis and buses, there is a lifespan,” said an RSTA official. Taxis of Indian make get eight years; other imported vehicles are given 12 and buses of Indian make receive seven years. After their specified length, they are not allowed for public transportation.
From March 2007 till June 2008, 4,319 vehicles were imported and registered with the RSTA. Nearly 40,000 vehicles are registered in the country, out of which 3,602 are government owned. Almost 32,000 are private, 2,325 are taxis, 59 have BHT (the Royal Family) numbers and 69 have diplomat licence plates.
In urban areas, the number of vehicles has been increasing at a rapid pace. Although air pollution is not yet a severe problem in Bhutan, incidences of urban air pollution are becoming more evident. This is mainly due to pollution from heating appliances, according to the NEC. Pollution from burning fuel wood (around 130,000 metric tons of firewood is consumed annually) and by forest fires during the dry seasons.
By Sonam Rinchen
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To my understanding any sales tax addressed by any or big area should be universally applied. Imagine this, if it’s 10% cheaper to deal a car at a place only 20 miles from where you live, will you trade in you home anymore? Finally it will be no one is paying the tax and that will severely ruin the economy of this country.
Hi it is on P3 but grade 6 and above gets quota. PCS is not working here and in many other places where it is to be given away. But it works when it is to be taken in from the public and civil Servants.