Bhutan’s new tax system as a model of sustainability

Bhutan’s new tax system as a model of sustainability

Landlocked between great nations, Land of the Thunder Dragon, Bhutan has been a must-visit destination for many souls across the globe. Among many of its attraction, the fortified Dzongs, the boulevard of cherry and peach blossoms and the meandering roads bent in its asphalt glory, all speak of tales of unprecedented beauty.  Yet nothing can beat the financial ease when it comes to travelling. However, there is a twist for the Indian tourists planning to visit Bhutan this year. The summer will not be any easy for those who are making sure to take the name off their list, as Bhutan has decided to levy a tax on tourists travelling from India, Maldives and Bangladesh. The tax is a “green tax” is a tax aimed at luxury vehicles and the government has been mulling levying the tax on vehicles of tourists coming into Bhutan from other countries.

The tax charged is the “SDF” or the “Sustainability Development Fee”. The tax is already charged to all foreign nationals, except tourists from India, Bangladesh, and the Maldives. The fee charged as SDF to foreign nationals is US$65.00 and not the US$16 (approx.) that is proposed for tourists from India, Bangladesh, and the Maldives.

“The international tourists already pay $250 (Rs 18,000 approx) as a minimum charge per day per person, which includes a $65 a day “Sustainable Development Fee”, as well as a $40 visa charge. Whereas tourists from India, Bangladesh and the Maldives don’t need to pay any fees or carry a visa.” (Source: Businesstoday.com )

The reason for such a reduced tax can be many, one of the reasons is to ensure that Bhutan continues to get a certain number of tourists from these countries but at the same time stop the extreme-budget tourists that currently make up for most of the tourists from these countries.  It can or cannot be right in ensuring that they don’t get swamped by backpackers and tourists who would settle into the local communities and never leave, and in turn have an adverse impact on the community, local culture, as well as the environment, thereby affecting the Bhutanese way of life. On a positive note, this introduction of the SDF from these tourists who make up a significant chunk of Bhutan’s tourist traffic would yield revenue for the government coffers which can then be directed towards several initiatives within the country. Indians made up for 70% of Bhutan’s tourists in 2018 and 70% of them are budget tourists who would find this new SDF a bit of a burden on their wallets. That said, it is only fair that all tourists, irrespective of their nationalities are charged an SDF fee. It is a privilege that Bhutan does not levy the foreign visitor fee of US$250 per day to tourists from these three countries, thereby allowing people from these countries to still be able to visit. 

“Being predominantly a leisure destination, Bhutan attracts family groups from India or Bangladesh. The ‘Sustainable Development Fee’ alone will cost a family of five Rs 22,000 extra for a short trip. That is quite high for budget-conscious tourists, who constitute 65-70% of the total number of Indian visitors to Bhutan. In fact, the impact will be quite visible if the total fee exceeds Rs 500 per person daily,” said Samrat Sanyal, general secretary of Himalayan Hospitality and Tourism Development Network.  (Source: economictimes.indiatimes.com)

Bhutan works on a High Value, Low Impact tourism policy which was called “high value, low volume” tourism policy since 1974, that later changed to “high value, low impact” in 2008. While this would impact Bhutan’s rapidly grown budget-tourism sector and economies built around it, it is for the better of Bhutan. The 30% tourists from India that are not budget tourists would not feel the pinch and neither would the 30% of other foreign nationals who visit Bhutan and pay US$250/day to stay in Bhutan, plus US$65 as SDF and another US$40 as visa fee. What this would lead to more revenue from entry permits and SDF for the Bhutanese government which they would then utilize for various sustainable initiatives and development projects within the country while providing high value to its visitors, whilst ensuring minimal impact on Bhutan and its way of life.

The backpackers and Budget tourists visiting Bhutan to clear off their bucket list will however have to deal with the 1200 rupees itch that is being levied this summer on. Exempted from the taxes, for now, the breezy towns of Bhutan are still flooded with numerous Indian tourists. A country which is famously known for its Gross National Happiness philosophy has always placed the welfare of its society and preservation of its cultural heritage, Bhutan continues to strive for quality over economic greed. A carbon negative land squeezed among the greatest countries; has much to offer to the world.

The concern of the government with respect to such implementation is just, as there have been many instances to cause the tax. The campfire accident caused by tourists who lodged themselves in the forest can be named as few, the immigration department does check out for hotel bookings beforehand, the constant littering on the road and the infamous cacophony of dunces especially by the vicinity of monasteries.  The recent incident of the Punakha- Dochula pass debacle is shameful for Indians; it is time the civic sensibility be taught as a separate subject in schools. These are thereafter guilt talk for a beautiful opportunity is turning costly after June.  

The trees are dry and the land is arid in this retreating winter. Though the wind blows in negative degrees, western Bhutan has a generous sun that is welcoming many regional tourists. The peak season is spring (March-April) when the naked trees bloom into beautiful colours and autumn (October-November) when flowers change hues. Summer is three months away with a whip to lash on budgets, as taxes take on names to constrict the freedom to travel.