The ministry of finance’s decision to levy revised Sales Tax (ST) and Custom Duty (CD) on imported vehicles entering the country is not well received by the general public.
However, vehicles imported from India are subject to only revised sales tax.
As per the finance ministry’s notification the revised rate for vehicles with a cylinder capacity of up to 1500 cc is 30 percent CD and 20 percent ST respectively. Similarly, 30 percent will be the ST and 30 percent CD for vehicles up to 2500cc. However, the ST for petrol vehicles with a cylinder capacity above 2501 cc remain similar to that of 1500 cc with a 20 percent increase in CD.
The ministry’s revised ST and CD rates for private busses and motor vehicles for transport of goods is almost equivalent to light vehicles.
Most people I talked to in the capital city on the matter were of the opinion that the rate of increase was high.
“The government sometimes have wanton ways of coming up with policies like this one. They think that levying increased taxes will discourage people from buying cars-lets wait and see,” said Tandin Wangyel, 37, a business man said.
While Jigme Wangchuk, 41, a corporate employee said that just about a decade ago cars were a luxury but today it has become a necessity. “Why is the government tightening it’s noose around people’s capacity to afford what has now become a necessity?” he questions.
The ministry’s justification behind the increased tax and duty as a progressive taxation for Karma Phuntsho, 33, hotelier, is but “a progressive taxation towards increasing government revenue.”
According to the proprietor of one of the car outlets in the capital, the revised duty and tax was not appropriate. “The effect on our business as I see it is nil. Even after the increase people will keep buying cars like anywhere in the world,” the proprietor said.
Yeshi Dorji, 44, a civil servant said that if the increase is because of the traffic congestion, “I see roads being widened. And if it is because of the environmental issues, why isn’t the government providing some subsidies on the import of electric cars?” he solicits.
For someone like Sonam Yeshey, 39, a businessman, the revision is good news. He expects to fetch better price for his two second hand cars which he intends to sale.
For Deki Yangden, 25, a business woman, the revision means having to depend on taxis for another few more years before she can accumulate enough cash to buy a car. “Bus services are not reliable. Taxi fares are phenomenally high. I feel victimized,” she said.
According to the Opposition Leader Tshering Tobgay the only solution to control the growing number of vehicles in the country is to “improve public transport and discontinue quota system.”