Once again! It is tax time. And soon civil servants working in the Department of Revenue and Customs will get busy like bees. We were told that taxation helps build our nation and hence tax is a good thing. It is been some years since I became part of this nation-building process in my own capacity. But I have been thinking about it for a long time. I am not sure if there are provisions in the Income Tax laws.
It is a well-known fact that most Bhutanese do not own houses in the towns. And for the same reasons our parental/ancestral houses remain vacant, devoid of mirth or the warmth that they once had. But again that is another story. We are talking about cities here. And there are some people who own houses in towns. Lucky people! As the law of demand and supply goes, house rents shoot above our heads. I will hardly be surprised if some day in future if it becomes beyond our capacity even to rent a bago (bamboo hut) in the town periphery.
The number of buildings in Thimphu or any other towns would remain more or less the same if we keep construction loans suspended. There are still no sign of recovery. An economist contends that this situation will only push the house owners to raise house rents to their tenants since we will now have more and more people looking for accommodations in towns.
Leave the demand supply talk aside for a while and instead turn our attention to tax now for it is tax time. Everyone knows (unless you are a resident of Changjiji Housing Complex - earning fat income) that more than half (in most cases) of our monthly earnings go towards house rent and in times like this it is very difficult to make ends meet for most people who are thrown in the towns to survive.
What we pay as house rent is not income as far it goes.
Contribution towards PF is tax exempted in Bhutan while that of insurance is 50%. Don't you think we should have some form of tax exemption towards house rent? I am sure there might be similar instances from elsewhere but can't say it with certainty. I think this will be a great relief to many people. Of course there might be instances where some people might put in a bago and claim to reside in a luxurious building. But if we implement it properly, these people can't cheat anymore because the same amount will also be reflected in the house owners' income statement. That way the house owners would be frank this time since it would hurt their income position.
We should all think about this - even if it isn't 100% exemption, at least 50-60% would be generous and a big relief!
But for now let's see what the authorities have to say about this! And until then have a nice time paying tax!