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.

Public business

Members of the National Assembly met last week to consider points submitted by the local governments and MNAs for inclusion in the Parliament’s 5th session.

The so-called “pre-agenda” meeting is an important conduit for issues of national importance to receive the National Assembly’s attention. We must take the issues seriously as they are an important part of our responsibilities. Article 10.2 of the Constitution requires that:

Parliament shall ensure that the Government safeguards the interests of the nation and fulfils the aspirations of the people through public review of policies and issues, Bills and other legislations, and scrutiny of State functions.

During the meeting, the opposition party proposed four issues to be included in the forthcoming session. They are:

  • Review of the recently approved Economic Development Policy;
  • Review of the government’s proposed reform measures for the construction sector;
  • Review of McKinsey, especially to consider how and why they were recruited, and the work that they are doing.
  • Review of the Punatsangchhu hydropower project and especially to consider why work that can be done by nationals are being awarded to foreign contractors.

The meeting decided against including these points in the agenda, arguing that the MPs would require a lot more time to study the issues carefully.

Since the opposition party feels that these issues are both important and urgent, we have decided not to wait for future sessions. Instead, the opposition party will file motions to discuss these issues during the Parliament’s fifth session itself.

The opposition party also appealed to the Honourable Speaker to permit live TV broadcast of the entire proceedings. The speaker reiterated that live TV broadcast would be allowed for all important sittings, but not for the entire session.

Update on fifth session

The National Assembly’s draft agenda for the fifth session of the Parliament was distributed yesterday. The Assembly will discuss the Water Bill, Financial Services Bill, Disaster Management Bill, and the Annual Budget 2010-2011.

The joint sitting of the Parliament will meet to discuss and endorse the Tobacco Control Bill, RMA (Ammendment) Bill, Standards Bill, and Service Conditions Bill for Constitutional Offices. In addition, the prime minister will report on the State of the Nation.

Please keep sharing your comments on these bills. And, don’t forget to check the National Assembly’s website periodically to see if new bills have been uploaded.

Civil liberties

Yesterday’s workshop on human rights awareness confirmed what most of us already suspect: that we don’t have serious human rights violations, but that, occasionally, human rights do get inadvertently sidelined.

Dasho Damcho Dorji, who is the Chairman of the National Assembly’s Human Rights Committee, explained that instances of human rights violations were isolated and that they were: “not intentional” and resulted from either “ambiguity in laws” or “over enthusiasm by young officials.”

But, intentional or not, the Human Rights Committee has decided to investigate all complaints they receive. They will also review legislation and government policies to ensure that our citizens are guaranteed basic human rights, guarantees that are enshrined in the Constitution as “Fundamental Rights”.

One fundamental right is that: A Bhutanese citizen shall have the right to freedom of speech, opinion and expression.

Yet, the Civil Service Bill that the National Assembly passed last year states that civil servants shall: Refrain from publically expressing adverse opinion against the Royal Government.

The Constitution guarantees the freedom of speech, opinion and expression, and yet a law is passed that would undermine that freedom for the more than 20,000 civil servants.

So I agree with the Human Rights Committee’s decision to review legislation to prevent “ambiguity in laws”. The review could also stop any intentional violation of human rights.

Our poll asks if civil servants should be allowed to express adverse opinions about the Government.

Original sin

How is it that the media – the press and television – reported that the proposal to increase the salaries of MPs originated in the National Council? The National Council session was broadcast on live TV, yet no one saw them discuss the salary increase. No one saw it, because it hadn’t been discussed in the National Council. In fact, a member of the National Council I met today claimed that the first time he heard about the pay increase was when the media reported that the National Assembly had approved it!

Remote control

So, BBS has not been permitted to broadcast live coverage of most of the proceedings of the fourth session of the National Assembly. Only the opening and closing ceremonies, and the discussions on the Anticorruption Commission’s annual report will be broadcast live. This is how it was in the National Assembly’s third session. And, like then, I am still concerned that the independence and freedom of the nation’s only TV station is being compromised.

But what I recently read in the Kuensel got me even more concerned. BBS’s general manager was quoted as saying: “MoIC wants us to submit a proposal for NA coverage and we did it.” The article goes on to state that the BBS “…are yet to hear from the ministry.”

BBS should be regulated by BICMA, not MOIC. And, BBS should be managed by its Board of Directors, not by MOIC.

Answering questions

In “Questioning questions” Di asked, “Did Kuensel report correctly that you were in the end supporting the PM in that the ministers need not attend QT?”

If that was what Kuensel reported, they are wrong. I did not say that ministers need not attend the National Council’s Question Time. What I did say, however, was that I appreciated our government’s efforts to accommodate the NC, as we, in the National Assembly, were told by the PM.

What I also said was that, as far as the opposition sees it, the issue is between the Cabinet and the National Council. And that, as such, we will not say that the ministers must attend the NC’s Question Time, or that they don’t have to attend.

But, I appealed to the government to discuss the matter with the National Council, so that the current standoff is resolved.

Turn on that switch!

The signal stops here

The signal stops here

It’s been one week since the National Assembly discontinued live TV coverage of its proceedings. And most of us have now resigned to the fact that the National Assembly’s discussions are not broadcast on live TV.

Not our villagers though. I still receive calls to appeal, on their behalf, for resumption of live coverage – on radio and TV – of the Assembly’s proceedings. Today, for instance, Tashi Gyeltshen telephoned me. Tashi is from remote Merak in Trashigang. And he’s a yak herder. He called to tell me that he wants to listen to the Assembly sessions on his radio. And, that he misses watching the sessions on live TV when he visits his gewog centre.

Incidentally, that TV set, complete with satellite dish and generator, was installed by the government to increase the public’s participation in the democratic process. In fact, every one of our 205 gewogs, including the remotest ones, were similarly equipped to allow our people to learn about and contribute to His Majesty the King’s vision of a vibrant democracy.

And then there are the BBS cameramen. Three of them are still stationed strategically, to cover every moment of the Assembly’s debates. They don’t sit. They can’t sit. They are on their feet, hours on end, operating their cameras that send live TV signals to the outdoor broadcasting van parked outside the Parliament. All that prevents the TV signals from going any further is the microwave transmitter switch in the OB Van.

Turn on that switch, and the TV signals would be instantaneously transmitted to the signal receiver tower in Sangaygang. From there, fibre optic cables would carry the signals to the BBS’s National TV Centre in Chubachu, where  the satelite earth station would beam them to INSAT4 A, an Indian satellite that BBS is allowed to use free of charge. That satellite would beam the signals right back to earth, and to Merak, where the live TV images would be received on their satellite dish. And, viewed by Tashi Gyeltshen the next time he visits his gewog centre.

On behalf of all the Tashi Gyeltshen’s in all our villages, I appeal to our honourable speaker and the members of parliament to allow the resumption of live TV and radio broadcast. And on behalf of the media I say: let BBS turn on that switch!

Third session

National assembly-2The third session of the first Parliament of Bhutan begins tomorrow. His Majesty the King will grace the inaugural ceremony of the third session. And the prime minister will submit his annual report on the state of our Nation to the Druk Gyalpo and the parliament.

The proceedings tomorrow will be broadcast live by BBS. As will the entire proceedings of the National Council. But the National Assembly, as of now, has not changed its decision to prevent the BBS from broadcasting most of its proceedings.

I’m still working on some talking points for tomorrow. But I’m finding it very difficult. What does one report to His Majesty the King, in the joint sitting of the parliament, when one is so disappointed and frustrated with our performance so far?