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Bhutan -Over all Revenue Performance
Current year collection V/S
Previous year collection
Revenue for the fiscal year amounted to Nu. 14,049.039 million recording a growth of 13.8% or Nu. 1,703.055 million over the previous year’s collection of Nu. 12,345.984 million. The tax revenue constitutes 46.1% of the total revenue while the non-tax forms the remaining 53.9%. The major increase under direct tax revenue is from Corporate Income Tax (CIT), Personal Income Tax (PIT) and collections from other taxes, where royalty forms the major components. The collection from Sales Tax and Excise Duty Refund from Government of India (GOI) under indirect tax has also contributed substantially to the growth in tax revenue.
Under non-tax revenue, increase is mainly from Tala Hydro Power Authority (THPA) and Royal Monetary Authority (RMA) as lump sum payment of profit transfer from RMA pertaining to the FY 2007/08 has contributed to the growth. In the past RMA used to remit the profit transfer in the form of advances and end year profit transfer, which used to be accounted in different fiscal years.
Current year collection V/S
target
The actual collection for the year exceeded the revised target of Nu. 13,848.413 million by 1.5% or Nu. 200.627 million. The collections from tax have exceeded the target by 11.2% while collections from non-tax fall short of target by 5.6%. The tax and non-tax revenue for the fiscal year stands at Nu. 6,482.409 million and Nu. 7,566.631 million respectively. The details of tax and non-tax revenue by source are depicted in Table 1.
Revenue Growth
The responsiveness of revenue to economy growth is commonly expressed in terms of buoyancy. Revenue buoyancy is a useful concept for measuring the performance of both revenue policy and administration over time. To evaluate how the revenue/tax policy and administration had been performing, revenue buoyancy was estimated for last ten years using five different popular methods. The average buoyancy estimated for the period is 1.1, indicating that the revenue has been buoyant for the last ten years and responsive to the economic growth. Compared to the previous year the average buoyancy has shown slight improvement. Further improvement of performance is anticipated in the coming years with strengthening of administration and rationalization of revenue policy.
Summary of National Revenue: FY 2008-09
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Source of Revenue
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2007-08
(Net Revenue)
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2008-09
(Net
Revenue)
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(+) or (-) (Nu)
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(+) or (-) (%)
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% over total revenue
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Tax Revenue (I+II)
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5,238.357
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6,482.408
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12,44.051
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23.75
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46.14
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Direct Tax
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3,386.784
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4,328.726
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941.942
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27.81
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30.81
|
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Corporate
Income Tax
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1,817.267
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2,340.935
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523.668
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28.82
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16.66
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Business
Income Tax
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464.943
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553.426
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88.483
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19.03
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3.94
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Personal
Income Tax
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264.662
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387.479
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122.817
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46.41
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2.76
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Other
Tax Revenue
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839.912
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1,046.886
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206.974
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24.64
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7.45
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Motor
Vehicle Tax
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107.954
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117.491
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9.537
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8.83
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0.84
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Business
& Professional
Licences
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52.898
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65.468
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12.570
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23.76
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0.47
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Foreign
Travel Tax
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22.556
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25.904
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3.348
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14.84
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0.18
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Municipal
Tax
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25.365
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9.697
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(15.668)
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(61.77)
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0.07
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Health
Contribution
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58.194
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71.275
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13.081
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22.48
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0.51
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Royalties
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572.945
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757.051
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184.106
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32.13
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5.39
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Indirect Tax
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1,851.573
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2,153.682
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302.109
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16.32
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15.33
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Sales
Tax
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830.987
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918.243
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87.256
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10.50
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6.54
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Excise
Duty
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877.715
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1,040.688
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162.973
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18.57
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7.41
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Import
Duty
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129.479
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177.960
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48.481
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37.44
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1.27
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Other
Tax Revenue
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13.392
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16.791
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3.399
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25.38
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0.12
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Non-Tax Revenue
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7,107.627
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7,566.631
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459.004
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6.46
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53.86
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Adminstration
Fees & Charges
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238.566
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236.767
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(1.799)
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(0.75)
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1.69
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Dividends
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2,479.823
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1,915.090
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(564.733)
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(22.77)
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13.63
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Revenue
from Govt. Departments
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256.905
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194.757
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(62.148)
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(24.19)
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1.39
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Capital
Revenue
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84.356
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96.424
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12.068
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14.31
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0.69
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Transfer
of Profits
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2,366.124
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3,394.543
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1,028.419
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43.46
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24.16
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Other
Non-Tax Revenue
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22.502
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33.772
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11.270
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50.08
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0.24
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Interest
on loan from
corporations
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1,659.351
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1,695.278
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35.927
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2.17
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12.07
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Total Revenue (A+B)
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12,345.984
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14,049.039
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1,703.056
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13.79
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100.00
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Tax Revenue
The overall tax revenue for the year is Nu. 6,482.409 million registering a growth of 23.8% or Nu. 1,244.052 million over Nu. 5,238.357 million in the previous year. Though the collections from both direct and indirect tax have improved, the major increase is noted under direct taxes mainly from CIT, PIT and royalty collections. The direct tax has recorded 27.8% growth over the previous year’s collection, while the indirect tax has recorded 16.3%. Tax revenue forms 46.1% of the total revenue.
Direct Tax
The collection from direct tax stands at Nu. 4,328.726 million registering a growth of 27.8% or Nu. 941.942 million against the previous year’s collection. The sources under direct tax have registered a notable growth with PIT registering the highest growth of 46.4% followed by CIT with 28.8% and Business Income Tax (BIT) at 19%. The collections from other direct taxes comprising of motor vehicle taxes, municipal taxes, royalties have registered a growth of 24.6%. Direct tax constitutes 66.8% of the total tax revenue and 30.8% of the total revenue.
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