Fronting: a lopsided concept

28 November 2008

Sir, I read with interest the article by Sangay Wangchuk on the above subject in your November 21 issue. I would like to offer my comments but first I want to dwell on the 108 trade licences that were seized and cancelled in 2007.

As this number 108 crops up quite frequently in the media, I must mention here that my name was also wrongly included in the infamous list.

The exercise was conducted by trade officials very superfluously. Any unit having a non-Bhutanese manager was labelled as fronting without questioning the owner concerned.

My enterprise, Dolma Enterprises, is not a fronting unit so I had to fight tooth and nail with the authorities and cleared my name. I got back my trade licence duly renewed. The balance 107 owners did not do anything and their licences remained seized and cancelled. This meant I was the only one who retaliated vehemently and succeeded simply because I was right.

I think most of the cancelled licences were of small businesses like electrical appliance repairs, watch repairs, telephone booth, petty groceries, tyre repairs etc. where the licence owners were getting a few thousand ngultrums as rental every month. As issue of trade licence is liberal it can be easily presumed that more new licences were issued and fronting goes on unabated. It is not correct to say that Bhutanese lack business acumen as compared to outsiders. The only difference is that most Bhutanese don’t work hard enough like the outsiders and they tend to indulge in luxurious habits like gambling and driving fancy cars.

I believe that there are about 500 plus trade licences in the border towns issued to outsiders and the majority of them are in Phuentsholing and Samdrp Jongkhar. I may not be right but I strongly feel that the Bhutanese traders face stiff competition within the country from these licence holders. They have many advantages over Bhutanese traders such as maintaining stocks both in Jaigaon and Phuentsholing, paying tax only on goods they want to bring in unlike Bhutanese who have to pay the tax on entire stock before they enter through the gate.

This tax is called Bhutan Sales Tax (BST) which according to its nomeclature should ideally be collected after goods are sold. Here we pay BST in advance just for the convenience of Revenue & Customs and thereby a good amount of money is blocked on goods lying unsold in stock.

Lack of coordination among government departments like trade and industry, labour, immigration, revenue and customs, police et al also affect Bhutanese traders quite adversely. I only hope that the new DPT government will bring in revolutionary changes in the system that will help grom the private sector.

Migma T. Nadik Proprietor Dolma Enterprises Phuentsholing

Ratings: 1 Star