Income tax contributions have surged by approximately 12.5 percent during the 2022 income year compared to the previous year, according to the Finance Ministry.
The revenue from personal income tax (PIT), corporate income tax (CIT), and business income tax (BIT) for the income year 2022 reached Nu 13.33 billion, marking an increase from Nu 11.86 billion in the previous year.
The total income tax revenue stood at Nu 9.69 billion for 2020 and Nu 10.94 billion for 2019.
Specifically, PIT contributed Nu 1.88 billion in the income year 2022, up from Nu 1.53 billion in the previous year.
At the same time, CIT witnessed a surge, contributing Nu 10.37 billion, compared to Nu 9.28 billion in the preceding year, while BIT contributed Nu 1.07 billion, a modest increase from Nu 1.05 billion in the previous year.
An official from the Finance Ministry attributed the rise in CIT collection to increased tax payments from entities such as Druk Holding and Investments (DHI), Bhutan Telecom Limited, and State Mining Corporation Limited.
The DHI group had contributed Nu 8 billion as a tax contribution to the government in 2022, reflecting a 10.1 percent increase from the previous year.
This increase was attributed to higher dividends received from DHI companies.
In 2021 and 2022, the DHI group contributed Nu 7.3 billion and Nu 5.6 billion, respectively.,
For the income year 2023, the Finance Ministry’s Macroeconomic Framework Coordination Technical Committee and the Department of Macro-Fiscal and Development Finance anticipate a 17.5 percent growth in income tax revenue.
The projected income tax revenue is estimated to reach Nu 15.67 billion, with PIT at Nu 2.19 billion, BIT at Nu 1.82 billion, and CIT at Nu 1.17 billion. The forecast considers various factors, including assumptions, gross domestic product, consumption, effective tax rates, and policy reforms.
Addressing challenges in taxation, the ministry highlighted concerns about taxpayers inaccurately declaring income, resorting to income suppression, or overstating expenses.
The number of individuals filing taxes for the income year 2022 has increased by 5,313, totaling 111,253 individuals. Both PIT and BIT filers witnessed an increase, while CIT filings experienced a slight decrease.
The number of individuals filing for rental income also saw a rise, reaching 4,664 compared to 4,514 in the previous year.