Bhutan mulls levying green tax on ‘regional’ tourist vehicles

In what would be a major policy change, Bhutan is planning to impose a ‘green tax’ on foreign vehicles carrying “regional” tourists to that country

Feb 06, 2020

In what would be a major policy change, Bhutan is planning to impose a ‘green tax’ on foreign vehicles carrying “regional” tourists to that country. 

According to the plan, each foreign vehicle will have to pay Nu 2,000 (28.10 USD) as entry free and as much amount as exit fee. But such vehicles should be parked at the hotel while in the country, Kuensel reported.

“Regional” tourists coming in such vehicles should hire local vehicles for sightseeing purposes. But they will be allowed to use their vehicle from one hotel to another within Bhutan, say from Thimphu to Paro for changing the place of lodging.

The second option is that regional tourists can come in a foreign vehicle and also use the same vehicle for sightseeing. The government will levy Nu 4,500 (63.22 USD) per day on such a vehicle, according to the plan.

Foreign Minister and chairman of Tourism Council of Bhutan (TCB), Dr Tandi Dorji, said that the policy is subjected to the endorsement of the Cabinet. The policy, he said, has been discussed with stakeholders, including the TCB, but is yet to be tabled in the Cabinet.

The plan is being discussed at a time when the National Assembly has endorsed the Tourism Levy and Exemption Bill, which imposes a sustainable development fee (SDF) of Nu 1,200 (16.86 USD) per night per regional tourists. The SDF is expected to be implemented from July this year.

The green tax plan has already been presented to Members of Parliament, who said it’s the prerogative of the government to implement or not.

The objective is to control vehicle congestion and provide jobs to local people. The proposed policy is expected to encourage regional tourists coming by road to hire Bhutanese vehicles.

The levy of green tax will be part of the policy reforms on “regional“ tourists.

The Prime Minister on February 3 said in the National Assembly that tourist entry points would be opened in Gelephu and Samdrupjongkhar in July or August. Additional gates are expected to help tourism development in Sarpang and Samdrupjongkhar and the neighbouring dzongkhags where SDF for regional tourists will be exempted.

One of the concerns of such a policy has been whether locals in neighbouring countries  would ask for similar levies on Bhutanese vehicles. However, people coming to Bhutan in international vehicles are leisure tourists, while Bhutanese vehicles use Indian roads for transit and transport of goods.