The Chairperson of the Economics and Finance Committee, Hon’ble Member of  Gangzur-Minjey Constituency presented the Committee’s Review Report on the Balance of Trade along with the Committee’s observations and recommendations to the House today.

The Chairperson reported that the Committee reviewed the balance of trade with the objective to curb the negative balance of trade, foreign reserves, and facilitation of export and import business. The Committee identified  20 issues of which some were resolved and few were forwarded to the concerned agencies during the consultation with the relevant agencies. The Committee submitted 6 issues in the house for deliberation as follows:

1. Enhance competitive advantage through tax policy
   1. 1 Effect of Tax differential between India and Bhutan
   2. 2 Transport and logistics
2. Import Substitution
   1. 1 Need for support for local industries that promote import substitution
3. Industries and businesses
   1. 1 SOEs as competitors
   2. 2 Losing business in border towns
   3. 3 SDF for non-tourist

After a lengthy deliberation on it, the Committee’s recommendation to address the Goods and Services Tax (GST) differences through a Preferential Trade Agreement and to Reform Bhutan Sale Tax (BST) for competitive advantage. The House supported the recommendations through a majority show of hands. However, the house did not support the recommendation to revisit the reduction of the high voltage power tariff for industries as the Government had already prepared the domestic tariff projection 2040.

On the transport and logistics challenges, the Committee recommended expediting the railway link and waterways; exploring ropeways, and enhancing bridge load-carrying capacity. The House supported the recommendation with a majority show of hands.  The House also supported the three recommendations to support local industries that promote import substitution. The recommendations were as follows:

1. Promote and support local products through policy interventions.
2. Encourage the production of cereals, particularly wheat and barley.
3. Intensify the single window service system in order to avoid cumbersome procedures.

The deliberation on the remaining Committee’s recommendations will be continued on 14^th November 2022.