Disaster relief

Chamkhar fire

At 2:00 am yesterday morning, even as fire raged through Chamkhar town, the Galpoi Zimpoen’s office was already coordinating efforts to control the disaster. Three hours later, together with the Dzongdag, Royal Bhutan Police, civil servants, monks, students and local residents, His Majesty the King’s representatives in Bumthang were able to contain the fire from spreading throughout the town.

By then, the inferno had left behind a trail of destruction – two men lost their lives, 42 houses were razed to the ground, 66 shops were destroyed, and 267 people were left homeless.

But, at the command of His Majesty the King, who is in India, the Zimpoen’s office was already busy arranging food and temporary shelter for the shocked victims. And by the afternoon, His Majesty the Fourth King had reached Chamkhar to personally oversee the relief and recovery efforts.

Most of the victims in Chamkhar have lost their entire life savings. And their road to recovery will be long and difficult. I hope that their plight will move the Parliament to establish the Relief Fund as soon as possible.

Photo credit: BBS

Recalling 21/9

Wanted: Relief Fund

Yesterday, we marked the first anniversary of the 21st September earthquake. It gave us reason to recall the widespread destruction that the earthquake unleashed on the Eastern parts of our country, and the untold sufferings that our people had to endure.

It also gave us reason to celebrate the indomitable spirit of the Bhutanese people. During the past year, thousands of homes and countless lives have been rebuilt, as people from all walks of life – famers, civil servants, the clergy, the business community, armed forces, students, and civil society – throughout our kingdom, came together and joined the massive relief efforts that were initiated and personally led by His Majesty the King.

To be sure, a lot of work still remains to be done. A majority of the damaged houses are still under reconstruction. And His Majesty’s Peoples’ Project is still on a war footing helping earthquake victims rebuild their lives.

So, yesterday, as a member of parliament, I had reason to be concerned. It’s already been a year since the earthquake, and relief works continue. Plus nobody knows when the next big natural calamity will strike. Yet we, MPs, have not yet established the Relief Fund, which according to Article 14 Section 12 of the Constitution:

Parliament shall establish a relief fund and the Druk Gyalpo shall have the prerogative to use this fund for urgent and unforeseen humanitarian relief.

The ruling party and the government must act immediately to establish the relief fund. Otherwise, the opposition party may feel compelled to introduce a private bill to establish the important fund.

About fines

Bathpalathang

I’m impressed at the government’s readiness to abide by the law. Bhutan Today (whose website has been woefully inadequate) had recently reported that:

The prime minister has ordered the information and communication ministry to pay about Nu 2.3 million in penalty for not following the environmental impact assessment (EIA) procedures in the construction of the Bathpalathang airstrip in Bumthang.

But I’m not impressed at the prime minister’s cavalier disregard for the basic principles of accountability when he added that:

… the fine will have to be levied even if it means paying from one pocket to another.

I wonder what the Royal Audit Authority will have to say to that.

Incidentally, last week, in Bumthang, I visited the Bathpalathang airstrip site. The construction there seems to have already resumed. I am impressed.

Taking people for a ride

Bhutan Today has quoted MP Ugyen Wangdi, the National Assembly’s legislative committee chairman, of accusing the opposition leader of trying to “hoodwink the people of Bhutan” and taking “the people of Bhutan for a ride”. He was referring to my continuing protests over the government’s unlawful tax increases.

Obviously, Dasho Ugyen is entitled to his views. And, yes, I’ll defend his right to express them. But I’m surprised at his views. After all, he’s the very MP who tabled the motion in Parliament to amend the provisions of the Sales Tax, Customs and Excise Act 2000 that he considered to be inconsistent with the Constitution.

Here’s his Notice of Motion:

Amendment of the Sales Tax, Customs and Excise Act of the Kingdom of Bhutan, 2000.

As per Part I, Chapter 3, Section 4.2 of the Sales Tax, Customs and Excise Act of the Kingdom which was passed by the then National Assembly of Bhutan, the Royal Government is given the power to approve the fixation of the rates of Sales Tax and any revision thereof, and the range of commodities and services under the Sales Tax Schedule. On the other hand, Article 14, (1) of the Constitution states that taxes, fees and other forms of levies shall not be imposed or altered except by law. As such, any change in sales tax and customs duty needs to be done in concurrence with the Parliament.

In accordance with Article 1(10) of the Constitution, the undersigned would like to propose to the House that the relevant agency shall be directed to make necessary amendments to the Sales Tax, Customs an Excise Act of the Kingdom of Bhutan, 2000 and submit it to the National Assembly for amendment.

In his motion, Dasho Ugyen refers to Article 14, Section 1 of the Constitution and concludes that, “As such, any change in sales tax and customs duty needs to be done in concurrence with the Parliament.” And that’s exactly what I’ve been saying: only Parliament can raise taxes, not the government.

Dasho Ugyen also refers to Article 1, Section 10: “All laws in force in the territory of Bhutan at the time of adopting this Constitution shall continue until altered, repealed or amended by Parliament. However, the provisions of any law, whether made before or after the coming into force of this Constitution, which are inconsistent with this Constitution, shall be null and void.” Again, exactly what I’ve been saying: the provisions of the Sales Tax, Customs and Excise Act 2000 that gave the government the authority to raise taxes are now “null and void”.

So I really don’t understand why Dasho Ugyen is so upset that I’m continuing to challenge the tax increases imposed by the government.

Perhaps it’s because I did not, as he put it, raise my voice at all on this issue in the House when he tabled the motion. He’s correct: I did not take the floor then. But I did not speak for a very simple reason: I supported the motion. In fact, every member of the National Assembly supported the motion!

State of the Nation

Reporting to Parliament

The projected order of business for the Fifth Session of the First Parliament for Bhutan had, among many others, the following two entries:

Thursday, July 1:

Presentation of the Annual Report on the State of the Nation, including Legislative Plans and the Annual Plans and Priorities of the Government, to the Druk Gyalpo and to the Joint Sitting of the Parliament.

Monday, July 12:

Deliberation on the presentation of the Annual Report on the State of the Nation including Legislative Plans and the Annual Plans and Priorities of the Government by the Prime Minister

As we all know, the prime minister delivered his State of the Nation address, as scheduled, on 1st July. But for reasons still unknown, we didn’t get to discuss the prime minister’s State of the Nation report. We didn’t discuss it, as scheduled, on 12th July. Nor did we discuss it at another time.

It wasn’t like that last year. The State of the Nation report was discussed, albeit briefly, in the National Assembly immediately after the prime minister delivered it to the joint sitting of Parliament.

I hope it won’t be like that next year.

The State of the Nation address is important. It is the prime minister’s report to the Druk Gyalpo, the Parliament and the nation at large, on the social, economic, financial and political condition of our nation. It gives the prime minister the opportunity to highlight the government’s successes over the previous year. And it allows him to outline the government’s legislative plans, policy agenda and national priorities for the next year.

Naturally, the prime minister would expect us, parliamentarians, to consider his annual report carefully. And to spend as much time as needed discussing it to offer valuable feedback.

But more importantly, our people would expect us, their representatives, to consider and discuss the prime minister’s State of the Nation report thoroughly so that they can rest assured that the Parliament is doing its job.

Photo credit: National Assembly

Pride or disgrace?

How has it fared?

The Parliament met in a joint sitting yesterday to conclude its fifth session. And just like that, the first Parliament of Bhutan has already completed half of its 10 regular sessions.

So I’ve been thinking about the past five sessions, and researching how we, your members of parliament, have bought you pride or disgrace during the course of our work. I may write about it, but sometime later.

In the meantime, I invite you to share your thoughts on how we have fared so far. Which were our best moments? Which were our worst? And which made you laugh?

I’ve featured the Parliament building in the banner to remind you to give us, parliamentarians, your insights.

Favouring foreigners over locals

The National Assembly passed the Financial Services Bill last week. I voted against it. I did so because the Bill seems to favour foreign investors over our own people and companies.

Section 50, on restrictions on ownership of financial institution and investments by financial institutions, reads:

No person shall hold more than the following percentage of interest in shares of a financial institution:

(a) in case of an individual, 10 percent,

(b) in the case of a company not being a financial institution, 20 percent

(c) in the case of a company being a financial institution, as per the limit provided under section 53 below, and

(d) in case of a foreign financial institution, as per the RMA regulations in line with the foreign direct investment policy

According to Section 53:

No financial institution can have ownership in another financial institution exceeding 5 percent of the other financial institutions’ paid up capital.

And RMA regulations currently allow foreign financial institutions to own 51 percent of a financial institution’s paid up capital.

So, here’s what I took exception to:

Our people cannot own more than 10%, and our companies cannot own more than 20% of a financial institution. But a foreign company can own 51%.

Our financial institutions cannot own more than 5% of another financial institution. But a foreign financial institution can own 51%.

The Bill favours foreign companies over our own companies. And how did the government respond when they realized this bias? They protected government owned companies by inserting a new subsection under Section 50, one that reads:

(e)   in the case of Ministry of Finance, RGoB, 75%.

Wanted: free, frank and thorough discussions

Yenlag or not?

Yenlag or not?

Today, for the second time in less than one year, a joint sitting of the Parliament will discuss the Civil Service Bill. Parliament had discussed and rejected the Bill last year due to irreconcilable differences on some fundamental principles of the bill.

I hope that this time we, parliamentarians, can find a consensus to pass this very important legislation. But that will depend on our willingness and ability to engage in free, frank and thorough discussions on the differing interpretations of the Constitution’s provisions about the civil service.

That did not happen last year. There was very little debate on real issues like the independence of the judiciary and constitutional bodies. Hence the impasse. And hence a dead bill.

But we still haven’t learnt the lesson. That’s why the discussions last week on the proposed thromdes, especially when it came to interpreting the Constitution, were not free, frank or thorough. And that’s why the joint sitting eventually rejected the proposed list of yenlag thromdes.

The Constitution, on Local Governments, Article 22 Section 6 says that:

The Dzongkhag Tshogdu shall comprise:

(a)          The Gup and Mangmi as the two elected representatives from each Gewog;

(b)          One elected representative from that Dzongkhag Thromde; and

(c)           One elected representative from Dzongkhag Yenlag Thromdes.

One interpretation, favoured, by the opposition among others, is that a Dzongkhag Tshogdu cannot be complete if the representative of the yenlag thromde is not available. And to have that representative, a dzongkhag – every dzongkhag – must have at least one yenlag thromde.

Attempts to discuss this provision of the Constitution, which is also reproduced verbatim in the Local Government Act, were sidelined, leaving many parliamentarians confused and frustrated. Hence the impasse. And hence the rejection.

I hope we’ve learnt the lessons. And I hope that the second joint sitting on the Civil Service Bill succeeds today. That will depend on our willingness and ability to engage in free, frank and thorough discussions.

UPDATE: The Parliament endorsed the Civil Service Bill. All but two members, both from the NC, voted in favour of the Bill. One member voted against the Bill, one member abstained. The Parliament also endorsed the National Standards Bill, this one by 100%.

Working with NC

The prime minister, in his State of the Nation address, on differences between the National Council and National Assembly:

Already several issues have arisen between the National Council and this House which inevitably raised the question of seeking the guidance of the Supreme Court even before it was established. Now with its establishment, the wisdom of the judiciary too will be tested if indeed constitutional issues are brought before it.

My hope is that, through the ongoing dialogue between the two houses, these issues will be resolved without judicial intervention.

Very good.

Now prove that there’s some genuine commitment to resolve the many outstanding issues that the government and the National Assembly have with the National Council. Initiate that “ongoing dialogue”. And if differences can’t be resolved, seek the judiciary’s assistance. Major disagreements that need immediate attention are:

  1. Constituency Development Grant. The government has completely ignored the National Council’s repeated assertions that the CDG is unconstitutional.
  2. Question Time: Ministers have once again stopped attending the National Council’s Question Time.
  3. Budget appropriation. The National Council’s role in approving money and financial bills, especially in passing the budget, is still unresolved.
  4. NC resolutions. The government has not responded to any of the National Council’s resolutions. And during the current session, the National Council has made strong observations on the  economic development and FDI policies.

Taxing job

How not to raise taxes

Breaking News! Opposition Leader calls for Finance Minister’s resignation!

Actually, that’s yesterday’s news. That’s when the opposition leader called for the finance minister’s resignation, during the budget discussions in the National Assembly.

But, for some reason or the other, the news has still not reached the media. Bhutan Today, Kuensel, BBS and all the radio stations have been remarkably silent on the opposition leader’s demand.

The media may be uninterested. But you, I’m quite sure, want to know why I proposed such an audacious measure. Here’s the story.

Chapter 5 of the 2010-2011 National Budget is about the tax reforms and incentives that the government recently announced. When introducing it, the finance minister informed the National Assembly that the tax reforms – rationalization of sales tax and customs duty rates, and broadening the tax base – would “strengthen the government’s revenue base”. And that the fiscal incentives would “stimulate private sector growth and attract new investments.”

There’s no doubt that that would be the case. Except that I haven’t yet seen the details. The finance minister’s report was only an overview, and we, members of parliament, were not told which taxes were revised by how much. Like you, I also happen to know the increases in sales tax and customs duty for vehicles. But that’s only because the finance ministry is already implementing it!

The finance minister informed the National Assembly that the tax reforms and fiscal incentives have already been approved by the government. He explained that the government’s authority to approve the tax reforms comes from Part I, Chapter 3, Section 4.2 of the Sales Tax, Customs and Excise Act 2000 which states that:

The fixation of the rates of Sales Tax and any revision thereof … shall be approved by the Royal Government of Bhutan.

And Part II, Chapter 4, Section 6.1:

Customs Tariff and revisions thereof, shall be approved by the Royal Government of Bhutan.

Very good.

Except that the finance minister ignored the Public Finance Act 2007, Chapter III, Section 9 of which says that:

Raising of revenues through taxes shall be authorized by the Parliament.

And Chapter III, Section 14(b):

The Minister of Finance shall be responsible, inter alia, for: proposing taxation measures to the Parliament …

He also ignored that the government’s authority to approve taxes and customs duties according to the Sales Tax, Customs and Excise Act 2000 were repealed by the Public Finance Act, Chapter I Section 2 which states that the Act shall:

Supersede all laws, regulations, rules and notifications that are inconsistent with the provision of this Act …

But that’s not all. Important provisions of the Constitution were also blatantly overlooked. The government’s “tax reforms and fiscal incentives” should have been submitted to the National Assembly first, as according to Article 13.2:

Money Bills and financial bills shall originate only in the National Assembly …

According to Article 14.1 of the Constitution the Parliament’s approval is required to change the tax structure:

Taxes, fees and other forms of levies shall to be imposed or altered except by law.

And, Article 14.9 of the Constitution reinforces the National Assembly’s authority to approve taxes as government revenue:

Where the budget has not been approved by the National Assembly before the beginning of the fiscal year … Revenues shall be collected … in accordance with the law in force at the end of the preceding year …

Furthermore, the Constitution ensures that the government’s authority to approve taxes and customs duties according to the Sales Tax, Customs and Excise Act 2000 is repealed. Article 1.10:

… the provisions of any law, whether made before or after the coming into force of this Constitution, which are inconsistent with the Constitution, shall be null and void.

Taxes are important. They are the government’s principle means of generating revenue. But taxes are also dangerous. They can be misused to achieve corrupt or political ends. That’s why the laws of the land have checks and balances, and demands transparency whenever the government wishes to impose or revise taxes.

But that wasn’t the case. The finance minister ignored the Constitution and the Public Finance Act. And he bypassed the National Assembly.

That’s why I called for the resignation of the minister of finance.

Photo credit: Business Bhutan

UPDATE ( 30 June, 9:30 PM): I’ve just learned that BBS TV carried this story today.

UPDATE (1 July, 00:24): My apologies to Kuensel. They did run the story.