In the Third Reading of the Excise Tax Bill of Bhutan 2025 held today, the Member from Radhi-Sakteng constituency, member of the Economic and Finance Committee, presented the Committee’s review report on the Bill.

The Excise Tax Bill is a legislative initiative to introduce targeted taxation on the consumption of harmful and non-essential goods. The Committee's review focused on five main categories: alcohol, tobacco, pan masala, carbonated beverages, and emissions-related products. Emphasizing public health, social well-being, environmental sustainability and economic considerations, the revised Bill proposes a total of 170 taxable items, while exempting or zero-rating 262 items. The Member reported that the number of taxable goods has been reduced by 32 percent, from 157 in the GST Act 2022 Act to 108 in the current legislation, reflecting a balanced approach between public interest and economic considerations.

The House deliberated on all 207 sections of the Excise Tax Bill of Bhutan 2025, which comprises ten chapters and two schedules. During the discussion on provisions related to the Review Board and Appeals, the House directed the Committee to align the relevant clauses with those adopted in the Goods and Services Tax (Amendment) Bill of Bhutan 2025.

On Schedule 1 (BTC Codes and Commodities), the House endorsed the government's proposal to levy excise tax of Nu.1,200 per litre of pure alcohol content on all alcoholic beverages. The proposed excise tax on tobacco products, as submitted by the government, also received support from the House. Regarding the motor vehicle category, the House endorsed the Committee’s proposal, which includes both excise tax and green tax, while maintaining the rates below the current applicable taxes. The House also endorsed the submission made by the Member from Lamgong-Wangchang to further reduce the Excise tax on “Aerated waters, containing added sugar or other sweetening matter or flavoured” from 27% (proposed by the Committee) to 20%. 

The Economic and Finance Committee has been directed to review provisions under Schedule 2 (Sanctions for Offences) in consultation with legal experts and report to the House tomorrow before the Bill is put to vote for adoption.