Direct Taxes — Personal Income Tax (PIT)
PIT bracket structures across reference years, side by side.
PIT Brackets — 2017
| Minimum (Nu.) | Maximum (Nu.) | Rate |
|---|---|---|
| 0 | 200,000 | 0% |
| 200,000 | 250,000 | 10% |
| 250,000 | 500,000 | 15% |
| 500,000 | 1,000,000 | 20% |
| 1,000,000 | — | 25% |
PIT Brackets — 2022 to 2025
| Minimum (Nu.) | Maximum (Nu.) | Rate |
|---|---|---|
| 0 | 300,000 | Nil |
| 300,000 | 400,000 | 10% |
| 400,000 | 650,000 | 15% |
| 650,000 | 1,000,000 | 20% |
| 1,000,000 | 1,500,000 | 25% |
| 1,500,000 | — | 30% |
PIT — Eligibility & Income Sources
| Item | 2017 | 2022 to 2025 |
|---|---|---|
| Liable taxpayers (threshold) | All citizens and residents earning more than Nu. 200,000 per year | All citizens and residents earning more than Nu. 300,000 per year |
| Income sources subject to PIT | Salary; property; dividends; interests; income from cash crops; income from hire of privately-owned vehicles, plant and machinery; income from intellectual property rights | |
Indirect Taxes
2017 vs. 2022 comparison across Sales Tax / GST, Excise Duty, Green Tax, and Custom Duty. Select a tax below to view its detail.
Sales Tax / GST
Excise Rates
Green Tax
Custom Duty
Sales Tax / GST — Overview
| Aspect | 2017 — Sales Tax | 2022 — GST |
|---|---|---|
| Tax name | Sales Tax | Goods and Services Tax (GST) |
| Status | In force | GST passed 2020; planned to take effect mid-2022, replacing the existing sales tax system |
| Rate structure | 9 ad-valorem + 2 specific tax slabs; 0%–100% (narrow base) | Single standard rate of 7% (broad base) |
| Scope | Goods entering the country + limited domestic services (entertainment, hotels). Only 6 types of goods/services subject at point of sale. ~37% of total imports at 0% rate. | Broader base; fewer exemptions than 2017 sales tax system |
| Exemptions | ~37% of total imports exempt (0% rate); limited domestic goods | Essential foods (rice, seeds, oils, salt), agriculture inputs, gifts/donations to charities — see rate table below |
GST Rates & Exemptions by Category — Table A.3 (2022)
| Consumption Category | Rate | Exempt? |
|---|---|---|
| General | 7% | No |
| Essential food items: rice, vegetable seeds, mustard oil, sunflower oil, salt | 0% | Yes |
| Essential food items: fresh dairy products (milk, cheese, butter, curd), egg | 7% | No |
| Agriculture inputs | 0% | Yes |
| Transport by road | 7% | No |
| Postal services | 7% | No |
| Religious services | 7% | No |
| Gifts and donations to charities | 0% | Yes |
Sales Tax Rates for Select Items — Table A.1 (2017)
| Consumption Category | Sales Tax Rate (%) |
|---|---|
| Alcohol | 100% |
| Juice | 30% |
| Fuel and lubricants for personal transport (petrol, diesel, etc.) | 5% |
| Spare parts and accessories for personal transport | 5% |
| Telecom services | 5% |
| Glass and crystalware (drinking glass) | 5% |
| Electrical and parts thereof, sound recorders and reproducers | 5% |
| Boilers and parts thereof, lighting and heating | 5% |
| Articles of iron or steel | 5% |
2017 & 2021/2022
2025/2026 Schedule
Excise Rates — Overview
| Aspect | 2017 | 2021/2022 |
|---|---|---|
| Rate range | 30%–75% | 20% (food/beverage); 100% (tobacco and spirits) |
| Scope | Primarily restricted to domestically manufactured alcoholic beverages. Government also collects fees for liquor exports and excise permit fees for import of beer. | Expanded base: food/beverage items (pasta, juice, ice cream, nuts, sugar, water) added at 20%; tobacco at 100% |
| Policy mechanism | Domestic levy on select produced/imported items | "Excise equalization rates" applied on top of the 7% GST for products the government wishes to discourage (alcohol, tobacco) |
| Tobacco | Not levied (excise restricted to domestic alcohol in 2017) | 100% — applied as excise equalization rate on top of GST |
Excise Rates — Table A.2 (2017)
| Item | Rate |
|---|---|
| Liquor (rum, whisky, brandy) — Superior Brand | 30% |
| Liquor (rum, whisky, brandy) — Medium Brand | 60% |
| Liquor (rum, whisky, brandy) — Other Brands | 75% |
Excise Rates — Table A.4 (2021/2022)
| Item | Rate |
|---|---|
| Other nuts incl. areca and betel nuts | 20% |
| Sugar, incl. molasses and sugar confectionery (gum, chocolate) | 20% |
| Pasta | 20% |
| Fruit juice | 20% |
| Ice cream | 20% |
| Water beverage | 20% |
| Beverages (nonalcoholic), spirits and vinegar | 100% |
| Tobacco and its substitutes | 100% |
Tobacco Excise — 2017 vs. 2021/2022 Detail
| Feature | 2017 | 2021–2022 |
|---|---|---|
| Excise duty rate | Not applicable — excise restricted to domestic alcohol | 100% |
| Tax classification | N/A | Excise equalization rate |
| Application method | N/A | Applied on top of the standard 7% GST rate |
| Policy objective | N/A | Discourage use of products deemed harmful or socially undesirable |
| Revenue impact | No specific tobacco excise revenue reported | Contributed to "additional revenue from tobacco products" noted in FY2021-2022 |
Key Compliance Notes — Excise Tax Act 2025
Alcohol Content Basis: For beer, wine, and liquor, tax is calculated on the litre of alcohol content, not total liquid volume. | Annual Adjustments: From 1 July 2026, all specific sums (Nu. 1200, Nu. 1500, etc.) are adjusted annually to reflect CPI changes. | Registration Fees: Nu. 100,000/brand for imported liquors; Nu. 35,000 for domestic liquors. | GST Interaction: Products are also subject to standard 5% GST at point of sale in addition to excise rates.
Excise Tax Rate Schedule — Key Products (Effective 1 January 2026)
| Product | BTC Code | Commodity Description | Unit | Rate (2026) |
|---|---|---|---|---|
| Beverages — Alcoholic | ||||
| Wine | 2204.10.00 | Sparkling wine of fresh grapes | LTR | Nu. 1,200 / litre alcohol |
| Beer | 2203.00.00 | Beer made from malt | LTR | Nu. 1,200 / litre alcohol |
| Liquor (Whisky) | 2208.30.00 | Whiskies | LTR | Nu. 1,200 / litre alcohol |
| Liquor (Rum) | 2208.40.10 | Rum | LTR | Nu. 1,200 / litre alcohol |
| Alcoholic Beverages (other) | 22.07 / 22.08 | Ethyl alcohol (undenatured/denatured) | LTR | Nu. 1,200 / litre alcohol |
| Beverages — Non-Alcoholic | ||||
| Carbonated Drinks | 2202.10.20 | Aerated waters (added sugar/flavours) | LTR | 50% |
| Tobacco & Related | ||||
| Cigarette | 2402.20.00 | Cigarettes containing tobacco | NMB | Nu. 10 |
| Bedi (Biri) | 2403.19.20 | Biri | NMB | Nu. 10 |
| Chewing Tobacco | 2403.99.10 | Khani (chewing tobacco) | KGM | Nu. 1,500 |
| Other Tobacco | 2403.11.00 | Water pipe tobacco | KGM | Nu. 10,000 |
| Doma (Betelnut) | 2106.10.20 | Supari (betel nut cuts/powder) | KGM | Nu. 2,000 |
| Doma Khamtog | 2106.10.10 | Pan masala | KGM | Nu. 2,000 |
| Electronic Cigarettes | 85.43 | Electronic cigarettes | NMB | 100% |
| Motor Vehicles — Passenger Cars | ||||
| Family Car (Petrol ≤1,000 cc) | 8703.21.00 | Spark-ignition motor cars | NMB | 35% |
| Family Car (Petrol >3,000 cc) | 8703.24.00 | Spark-ignition motor cars >3,000 cc | NMB | 60% |
| Family Car (Diesel ≤1,500 cc) | 8703.31.00 | Diesel/semi-diesel | NMB | 50% |
| Family Car (Diesel >3,000 cc) | 8703.33.20 | Diesel/semi-diesel >3,000 cc | NMB | 70% |
| Family Car (Hybrid ≤1,500 cc) | 8703.40.10 | Hybrid motor cars | NMB | 2% |
| Family Car (Electric) | 8703.80.00 | Only electric motor for propulsion | NMB | 0% |
| Motor Vehicles — Goods & Special Purpose | ||||
| Goods Transport (Petrol ≤5T) | 8704.31.00 | Spark-ignition goods vehicles | NMB | 2% |
| Goods Transport (Electric) | 8704.60.00 | Only electric motor for propulsion | NMB | 0% |
| Tractors (all types) | 87.01 | Tractors | NMB | 0% |
| Motorcycles | ||||
| Motorbikes (≤50 cc) | 8711.10.00 | Motorcycles not exceeding 50 cc | NMB | 10% |
| Motorbikes (>800 cc) | 8711.50.00 | Motorcycles exceeding 800 cc | NMB | 50% |
| Motorbikes (Electric) | 8711.60.00 | Electric motor propulsion | NMB | 0% |
Green Tax — Overview
| Aspect | 2017 | 2022 |
|---|---|---|
| Status | In force (introduced 2012) | Remains in place following tax reforms |
| Policy objective | Protect the environment and reduce carbon dioxide | Unchanged |
| Motor vehicle rate | 5%–30% depending on vehicle type | Remains in place; revenue significantly increased |
| Fuel rate | 5% on petrol and diesel (applied since 2014) | 5% on petrol and diesel (unchanged) |
| Revenue trend | — | Revenue increased by 67.2% in FY2021-2022, driven by higher collections from both fuel and motor vehicles |
Green Tax Rates for Select Items — Table A.1 (2017)
| Consumption Category | Green Tax Rate (%) |
|---|---|
| Alcohol | 0% |
| Juice | 0% |
| Fuel and lubricants for personal transport (petrol, diesel, etc.) | 5% |
| Spare parts and accessories for personal transport | 0% |
| Telecom services | 0% |
| Glass and crystalware (drinking glass) | 0% |
| Electrical and parts thereof, sound recorders and reproducers | 0% |
| Boilers and parts thereof, lighting and heating | 0% |
| Articles of iron or steel | 0% |
Custom Duty — Overview
| Aspect | 2017 | 2022 |
|---|---|---|
| Rate structure | Variable: 10%–100% depending on item | Flat rate of 10% for most items following rationalisation exercise |
| Rationale for change | Complex, item-specific rates (see Table A.1) | Rationalisation to increase trader compliance, improve transparency, and reduce discriminatory application of different rates |
| Revenue impact | — | Drop in total custom duty collection following rate reduction to flat 10% |
| Exemptions | Diplomatic missions and international organizations; Bhutanese organizations and agencies; industrial plant, machinery, spare parts and raw materials; electric or hybrid vehicles; re-exported durable and consumable household and personal effects | |
Custom Duty Rates for Select Items — Table A.1 (2017)
| Consumption Category | 2017 Custom Duty | 2022 Custom Duty |
|---|---|---|
| Alcohol | 100% | 10% |
| Juice | 50% | 10% |
| Fuel and lubricants for personal transport (petrol, diesel, etc.) | 20% | 10% |
| Spare parts and accessories for personal transport | 10% | 10% |
| Telecom services | 0% | 10% |
| Glass and crystalware (drinking glass) | 10% | 10% |
| Electrical and parts thereof, sound recorders and reproducers | 10% | 10% |
| Boilers and parts thereof, lighting and heating | 10% | 10% |
| Articles of iron or steel | 10% | 10% |
Transfers
2017: CEQ 2017 — data not available. | 2022–25: Kidu programme (Druk Gyalpo's Relief Kidu).
Kidu (The Royal Grant) — Programme Overview
Kidu (The Royal Grant) is Bhutan's largest and most significant social assistance programme, serving as a permanent, non-contributory safety net. While the practice of Kidu has existed since the 17th century, it was systematised in the 1950s and has since been refined into a highly organised management and disbursement system.
Programme Overview and Management
- Administration: Administered by the Office of the Gyalpoi Zimpon and implemented through regional offices and local government officials, including Dzongdas (district governors) and Gups (block leaders).
- Technology: Utilizes the Kidu Information System, which is interoperable with databases from the National Land Commission and the Department of Immigration to verify eligibility and track management.
- Funding: Financed through the Druk Gyalpo Relief Fund Act 2012, which receives an annual Nu. 100 million replenishment from the Ministry of Finance, along with public and private donations.
Eligibility Criteria
The Kidu programme is designed to support individuals who fall through the cracks of other social protection systems. It specifically targets:
- The poor and extreme poor
- The landless
- Persons with disabilities
- Impoverished children and students
- Destitute elderly citizens who lack family care
Transfer Amounts and Sub-Programmes
Kidu provides both cash and in-kind transfers, such as land grants, timber for housing, and scholarships. Key sub-programmes include:
- Gensho Zhabtog (Support for the Elderly): Targeted at destitute senior citizens, providing a monthly stipend of Nu. 1,200. Beneficiaries can also request basic household items and groceries.
- Funeral Grant: A grant of Nu. 5,000 is provided to the family of a deceased Gensho Zhabtog beneficiary to cover funeral expenses.
- Gyalpoi Tozey (Scholarships): Provides educational support to impoverished students (reaching 1,629 beneficiaries in 2019).
- Goensho Tshamkhang: An elderly care home that accommodates up to 78 inhabitants who have no family to care for them.
Recent Changes and Trends
The most significant recent change to the Kidu framework was its adaptation to address the COVID-19 pandemic:
- Druk Gyalpo Relief Kidu (DGRK): Established in April 2020 as an interim (temporary) measure to provide income support to those suffering from economic distress due to the pandemic.
- Pandemic Impact: Between April 2020 and February 2022, the DGRK provided income support to 54,783 individuals and 15,464 children, reaching approximately 8.4% of the total population.
- Evolution toward Shock-Responsiveness: While the core Kidu remains a permanent fixture, it increasingly acts as an ad hoc support mechanism for covariate shocks (natural disasters or economic crises) in the absence of a formal national shock-responsive social protection floor.
Source: UNICEF. 2025. Social Protection Situational Analysis & Landscaping Assessment.
Kidu Recipients by Group
| Group / Category | 2020 | 2021 | ||
|---|---|---|---|---|
| Share of Group (%) | Share of Kidu Recipients (%) | Share of Group (%) | Share of Kidu Recipients (%) | |
| Overall | ||||
| Share of Kidu recipients (%) | 18.0 | — | 12.4 | — |
| By Job Type | ||||
| Public | 14.8 | 13.0 | 15.6 | 3.9 |
| Private | 8.0 | 29.2 | 13.4 | 18.3 |
| Laborer | 4.5 | 6.9 | 4.7 | 7.6 |
| Self-employed | 22.7 | 16.1 | 15.8 | 16.2 |
| Not employed / absent | 52.0 | 19.1 | 50.6 | 12.7 |
| By Sector | ||||
| Agriculture | 16.6 | 7.8 | 11.8 | 0.5 |
| Manufacturing | 5.2 | 16.9 | 5.7 | 11.6 |
| Services | 26.2 | 22.5 | 31.8 | 13.2 |
| Not employed / absent | 52.0 | 19.1 | 50.6 | 12.7 |
| By Urban / Rural | ||||
| Urban | 36.1 | 22.7 | 38.5 | 15.7 |
| Rural | 63.9 | 15.3 | 61.5 | 10.3 |
| By COVID Shock Severity | ||||
| Severe COVID shock | 16.4 | 28.6 | — | — |
| Severe shock not identified | 83.6 | 15.9 | — | — |
Notes: "Share of group" = share of individuals in that group in total respondents. "Share of Kidu recipients" = share of individuals who received Kidu within the group. "Severe COVID shock" respondents either stopped working, not seeking a job, or decreased operations because of COVID-19. Source: Authors' calculations. · Source: Bhutan Poverty Assessment
Subsidies
CEQ 2017: not included. CEQ 2022: electricity, agriculture, and fuel subsidies.
CEQ 2017
Subsidies were not included in the CEQ 2017 analysis — noted in original Excel file.
Electricity
Agriculture
Fuels
Approved Tariff Structure — Table 64 (BPC, Page 45)
| Tariff Structure | Unit | Sep 2022 – Jun 2023 | Jul 2023 – Jun 2024 | Jul 2024 – Jun 2025 |
|---|---|---|---|---|
| Low Voltage (LV) | ||||
| LV Block I (Rural*) — 0–100 kWh | Nu./kWh | 0 | 0 | 0 |
| LV Block I (High landers) — 0–200 kWh | Nu./kWh | 0 | 0 | 0 |
| LV Block I (Others) — 0–100 kWh | Nu./kWh | 1.28 | 1.28 | 1.28 |
| LV Block II (All) — >100 kWh | Nu./kWh | 2.66 | 2.66 | 2.66 |
| Medium Voltage (MV) | ||||
| Energy Charge | Nu./kWh | 1.60 | 1.60 | 1.60 |
| Demand Charge | Nu./kVA/Month | 170 | 170 | 170 |
| High Voltage (HV) | ||||
| Energy Charge | Nu./kWh | 1.60 | 1.60 | 1.60 |
| Demand Charge | Nu./kVA/Month | 496 | 496 | 496 |
| Wheeling | Nu./kWh | 0.23 | 0.23 | 0.23 |
*Rural: Free electricity (0 Nu./kWh) for first 100 kWh/month. High landers: Free electricity for first 200 kWh/month. Nu 2.66/unit recovered from HV consumers; remaining cost covered by BPC network charge for import of energy.
Per Unit Subsidy to LV & MV Consumers — Table 60 (BPC, Page 42)
| Customer Category | Sep 2022 – Jun 2023 (Nu.) | Jul 2023 – Jun 2024 (Nu.) | Jul 2024 – Jun 2025 (Nu.) |
|---|---|---|---|
| Low Voltage | |||
| LV Block I (Rural) — 0–100 kWh | 2.66 | 2.66 | 2.66 |
| LV Block I (High landers) — 0–200 kWh | 2.66 | 2.66 | 2.66 |
| LV Block I (Others) — 0–100 kWh | 1.38 | 1.38 | 1.38 |
Cost of Supply to HV Consumers — Table 53 (Page 39)
| Cost Component | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|
| Energy costs* | 5,538 | 6,864 | 7,193 |
| Network costs | 3,241 | 3,478 | 3,687 |
| Working capital | 54 | 56 | 60 |
| Other revenue | (39) | (47) | (5) |
| SO Charges | 11 | 29 | 92 |
| Unsubsidized Cost of Supply | 8,805 | 10,381 | 11,027 |
*Energy costs include cost of energy purchased from DGPC and MHP at average generation tariff @ Nu 1.60 per Unit.
Cost of Supply to LV Consumers — Table 55 (Page 39)
| Cost Component | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|
| Energy costs | 1,144 | 1,195 | 1,246 |
| Network costs | 2,018 | 2,108 | 2,309 |
| Working capital | 32 | 33 | 35 |
| Other revenue | (149) | (149) | (149) |
| Unsubsidized Cost of Supply | 3,045 | 3,187 | 3,441 |
Reviewed Domestic Cost of Supply to MV Consumers — Table 54
Nu. in Millions
| Cost Component | 2022/23 | 2023/24 | 2024/25 |
|---|---|---|---|
| Energy costs | 234 | 451 | 610 |
| Network costs | 484 | 511 | 551 |
| Working capital | 8 | 8 | 9 |
| Other revenue | (4) | (0) | (0) |
| Unsubsidized Cost of Supply | 723 | 971 | 1,170 |
Agricultural and Rural Subsidies
| Subsidy / Support Programme | Description and Transfer Details |
|---|---|
| Price Support for Bhutan Agro Industries | National subsidy spending explicitly includes price support for Bhutan Agro Industries to maintain operations. |
| Rural Life Insurance Scheme | A mandatory permanent scheme where the government provides a Nu. 108 subsidy toward the annual Nu. 195 premium, with the individual paying the remaining Nu. 87. |
| Rural House Insurance Scheme | A mandatory programme providing insurance for rural homes against natural disasters (fire, flood, earthquake), which is partially subsidised by the state to protect rural assets. |
| Economic Stimulus Plan (ESP) Subsidies | An India-financed plan (amounting to ~5% of GDP) that provides subsidies, capital grants, and support for equipment acquisition intended to raise productivity in agriculture and agribusinesses. |
| Low-Interest Agricultural Loans | The Ministry of Agriculture and Livestock (MoAL) facilitates low-interest loans specifically for the agriculture and livestock sectors. |
| Cost-Sharing Mechanism (RNR) | An established mechanism for the Renewable Natural Resource (RNR) sector to support development and community participation. |
| Electricity Subsidies | Included in national fiscal expenditure (0.27% in FY 2023–24) to support various operations, including those in rural and agricultural areas. |
| Wage Subsidies (via YELP) | While a labour programme, it provides monthly allowances (Nu. 5,000 to Nu. 9,000) to private sector employers, including those in the agricultural sector, to hire and train youth. |
Fuel Subsidies — Bhutan
| Aspect | Detail |
|---|---|
| Fuel source | Bhutan imports all its fuel from India. |
| Before March 2026 | Bhutan had no fuel subsidy — prices were set based on international prices and actual procurement costs. |
| March 21, 2026 | Bhutan introduced the National Fuel Price Smoothening Framework (NFPSF) with subsidies: Nu 16.31/litre — Petrol Nu 75.82/litre — Diesel |
| India's pricing arrangement | Bhutan receives fuel without Indian domestic taxes (zero-rated under GST, exempt from export duties). This is a tax exemption under the bilateral trade agreement, not a direct subsidy. |
| 2013 subsidy | India previously supplied subsidized LPG/kerosene to Bhutan, but cut that subsidy in 2013 (temporarily). |
Government Expenditure
Expenditure by sector/function. CEQ 2017: Table 2 from Annual Financial Statements (FY2016-17). CEQ 2022: Table 11(b) from DTA (FY2021-22 and FY2022-23).
Government Expenditure by Sector — Table 2 (FY2016-17)
| Sector | Amount (Nu. Million) | % of Total |
|---|---|---|
| Social Services | 15,087.73 | 28.6% |
| Health Services | 4,359.02 | 8.3% |
| Education Services | 10,728.71 | 20.4% |
| Economic Services | 15,058.83 | 28.6% |
| RNR Services | 6,764.55 | 12.8% |
| Mining, Manufacturing & Industries Services | 142.833 | 0.3% |
| Transport & Communication Services | 6,288.99 | 11.9% |
| Energy Services | 905.498 | 1.7% |
| Other Economic Services | 956.963 | 1.8% |
| Housing & Public Amenities Services | 2,109.68 | 4.0% |
| General Public Services | 15,219.90 | 28.9% |
| General Public Services | 10,475.73 | 19.9% |
| Public Debt Services | 4,744.17 | 9.0% |
| Religion & Cultural Services | 2,578.06 | 4.9% |
| Public Order & Safety Services | 2,657.87 | 5.0% |
| Total | 52,712.06 | 100% |
Current Expenditure by Function — Table 11(b) (FY2021-22 & FY2022-23)
| Description of Expenditure | FY2021-22 | FY2022-23 | % Change |
|---|---|---|---|
| Social Services | 10,914.120 | 14,720.210 | +34.87% |
| Education Services | 6,690.850 | 9,594.451 | +43.40% |
| Health Services | 4,223.270 | 5,125.759 | +21.37% |
| Economic Services | 3,312.262 | 3,681.872 | +11.16% |
| Energy Services | 107.265 | 109.120 | +1.73% |
| RNR Services | 2,016.059 | 2,289.025 | +13.54% |
| Mining, Manuftg & Industries Services | 86.493 | 86.761 | +0.31% |
| Transport and Communication Services | 829.510 | 940.586 | +13.39% |
| Other Economic Services | 272.935 | 256.380 | −6.07% |
| Housing and Public Amenity Services | 347.005 | 473.247 | +36.38% |
| General Public Services | 16,169.020 | 12,772.898 | −21.00% |
| General Public Services | 13,180.330 | 8,736.382 | −33.72% |
| Public Debt Services | 2,988.690 | 4,036.516 | +35.06% |
| Religion & Culture Services | 781.830 | 835.791 | +6.90% |
| Public Order and Safety Services | 2,920.480 | 2,944.000 | +0.81% |
| Total | 34,444.717 | 35,428.018 | +2.85% |
Education Spending
CEQ 2017 narrative and CEQ 2022 budget and socio-economic indicators.
Education Spending — CEQ 2017
The education system in Bhutan consists of general education, monastic education and non-formal education. The CEQ analysis only considers general education as it represents the formal education system and accounts for an overwhelming majority of government education spending. General education spans all stages of education from early childhood care education to tertiary/technical/vocational education. Most schools in Bhutan are public and provide everything free of charge, from textbooks to boarding facilities. In FY2016-2017, 5.9 percent of GDP was spent on education (0.9 percent of GDP on tertiary education).10 While public education is provided for free, students are encouraged to share a small portion of cost based on their financial ability.
10 For example, students in primary schools are required to pay Nu. 30 per annum, students in secondary schools pay Nu. 100–200 per annum, and students living in urban areas arrange their own stationery. According to the Bhutan Living Standards Survey 2017, the average out-of-pocket spending is Nu. 5,259 at the primary level, Nu. 5,708 at the middle secondary level and Nu. 23,879 at the higher secondary level. There are significant disparities in out-of-pocket spending between urban and rural areas.
Source: Bhutan CEQ 2017
Education Spending — CEQ 2022
Socio-Economic Indicators — Annual Education Statistics 2022 (Table E)
| Indicator | Value | Data Year |
|---|---|---|
| National Literacy Rate (6 yrs+) | 71.4% | 2017 |
| General Literacy Rate (Male) | 78.1% | 2017 |
| General Literacy Rate (Female) | 63.9% | 2017 |
| Adult Literacy Rate (15 yrs+) | 66.6% | 2017 |
| Adult Literacy Rate (Male) | 75.0% | 2017 |
| Adult Literacy Rate (Female) | 57.1% | 2017 |
| Youth Literacy Rate (15–24 yrs) | 93.3% | 2017 |
| Youth Literacy Rate (Male) | 93.1% | 2017 |
| Youth Literacy Rate (Female) | 93.0% | 2017 |
| Life Expectancy at Birth | 72.2 Yrs. | 2021 |
| Children <5 yrs stunted | 21.2% | 2015 |
| Children <5 yrs wasting | 4.3% | 2015 |
| Under-5 Mortality Rate | 28.5 | 2019 |
| Education exp. as % of govt. expenditure | 14.30% | FY2021/22 |
| Education exp. as % of GDP | 5.55% | FY2021/22 |
Chapter 12: Budget and Expenditure — CEQ 2022
The Bhutanese education system is built upon the concept of free services from primary to tertiary level. Students are not only given free tuition but also provided with textbooks, sports-items and learning materials as well as stationery and boarding facilities and food based on need. At the same time, cost-sharing is also encouraged amongst those populations that are in a position to contribute to their children's education. Accordingly, students studying in the urban areas arrange their own stationery.
In general, all students are required to contribute to the School Development Fund at the following rates:
- Primary Schools (PP-VI): Nu 30/- per student per annum
- Lower Secondary Schools (VII-VIII): Nu 100/- per student per annum
- Middle and Higher Secondary Schools (IX-XII): Nu 200/- per student per annum
Annual Budget & Expenditure by Department — Table 12.2 (FY2021-22)
| Department | Budget | Expenditure | ||||
|---|---|---|---|---|---|---|
| Current | Capital | Total | Current | Capital | Total | |
| Secretariat | 52.241 | 62.024 | 114.265 | 50.772 | 48.018 | 98.791 |
| Dept. of Adult and Higher Education | 20.910 | 321.304 | 342.214 | 19.923 | 305.605 | 325.528 |
| Dept. of School Education | 742.287 | 1,762.543 | 2,504.83 | 488.225 | 1,273.062 | 1,761.287 |
| Dept. of Youth and Sports | 34.265 | 29.986 | 64.251 | 31.818 | 24.825 | 56.643 |
| Dept. of School Curriculum and Professional Dev. | 35.996 | 53.264 | 89.26 | 35.318 | 37.410 | 72.728 |
| Total | 885.699 | 2,229.121 | 3,114.82 | 626.057 | 1,688.921 | 2,314.979 |
Health Expenditure
2017: Bhutan CEQ 2017 — Article 9, Section 21 of the Constitution of the Kingdom of Bhutan; Ministry of Health; National Health Accounts Report, Bhutan, Fiscal Years 2014-15 & 2015-16. | 2022: National Health Accounts data.
Health Spending — 2017
Health care in Bhutan is almost entirely funded and delivered by the Royal Government of Bhutan (RGoB) health institutions. Large investments in health care helped greatly to improve access and utilization in the past. Private health care services are limited to a few pharmacies and selective diagnostic centers, mostly in urban areas. Bhutanese can access public health services free of charge with only a few exceptions.11 Some services not covered include private cabin facility at government hospitals, cosmetic dental care, and drugs outside the national essential drug list. Specialized health services which are not available in the country are referred to hospitals in India at the cost of the government. In FY2015-16, the total health expenditure incurred by the government was around 3 percent of GDP.12
Source: Bhutan CEQ 2017
Health Spending — 2022
Health Expenditure & GDP — Table 2 (FY2018/19 & FY2019/20)
| Indicator | FY 2018/19 | FY 2019/20 |
|---|---|---|
| GDP (Nu.) | 178,201,890,000 | 192,309,624,722 |
| CHE (Nu.) | 6,233,340,873 | 7,656,293,990 |
| CHE RGoB (Nu.) | 4,803,742,128 | 6,136,965,439 |
| CF — Capital Finance (Nu.) | 978,605,495 | 1,048,422,566 |
| Total (CHE + CF) | 7,211,946,368 | 8,704,716,556 |
| CHE as % of GDP | 3.5% | 4.0% |
| CHE RGoB as % of GDP | 2.7% | 3.2% |
| Total (CHE + CF) as % of GDP | 4.0% | 4.5% |
Tax Revenue
General government revenue for CEQ 2017 (FY2016-17) and CEQ 2022 (FY2021-22 & FY2022-23).
CEQ 2017
CEQ 2022
2017 vs. 2022 Comparison
Table 1. General Government Revenue — CEQ 2017 (FY2016-17)
| Revenue 2016-17 | Amount (Nu. Million) | % Total Revenue | Amount BLSS (Nu. Million) | Total amount BLSS / national accounts | Total amount national accounts / national accounts private consumption | Total amount BLSS / BLSS private consumption |
|---|---|---|---|---|---|---|
| Tax Revenue | 21,564.465 | — | — | — | — | — |
| Direct Tax | 12,345.794 | 57.25% | — | — | — | — |
| Corporate Income Tax | 8,170.299 | 37.89% | — | — | — | — |
| Business Income Tax | 1,276.903 | 5.92% | — | — | — | — |
| Personal Income Tax | 957.313 | 4.44% | 1,332.3 | 139.17% | 1.10% | 2.40% |
| Other Direct Tax | 39.342 | 0.18% | — | — | — | — |
| Royalties | 1,901.937 | 8.82% | — | — | — | — |
| Indirect Tax | 9,218.67 | 42.75% | — | — | — | — |
| Bhutan Sales Tax | 3,800.12 | 17.62% | 2,677 | 70.45% | 4.37% | 4.80% |
| Excise Duty | 3,579.663 | 16.60% | 253.2 | 7.07% | 4.12% | 0.50% |
| Import Duty | 562.563 | 2.61% | 1,265.3 | 224.92% | 0.65% | 2.30% |
| Other Indirect Tax | 366.673 | 1.70% | — | — | — | — |
| Green Tax | 909.652 | 4.22% | 774 | 85.09% | 1.05% | 1.40% |
Table 5. Summary of Domestic Revenue Receipts — CEQ 2022 (FY2021-22 & FY2022-23)
| Code | Source of Revenue | 2022-2023 | 2021-2022 | % Change | % of GDP |
|---|---|---|---|---|---|
| Revenue | 44,874.885 | 39,043.073 | 14.94% | 18.93% | |
| A | Taxes | 31,466.676 | 25,843.052 | 21.76% | 13.27% |
| 1 | Taxes on Income, Profits and Capital Gains | 14,644.602 | 13,325.760 | 9.90% | 6.18% |
| 1.1 | Corporate Income Tax | 10,487.876 | 10,063.607 | 4.22% | 4.42% |
| 1.2 | Business Income Tax | 1,712.977 | 1,298.427 | 31.93% | 0.72% |
| 1.3 | Personal Income Tax | 2,443.749 | 1,963.727 | 24.44% | 1.03% |
| 2 | Taxes on Property | 162.980 | 144.625 | 12.69% | 0.07% |
| 2.1 | Recurrent Taxes on immovable property (Dzongkhag Municipality) | 4.922 | 8.986 | -45.23% | 0.00% |
| 2.2 | Taxes on Capital Transactions | 158.058 | 135.638 | 16.53% | 0.07% |
| 3 | Taxes on Goods and Services | 9,162.344 | 7,452.002 | 22.95% | 3.87% |
| 3.1 | Sales Tax | 7,154.806 | 5,608.668 | 27.57% | 3.02% |
| 3.2 | Excise | 574.821 | 386.229 | 48.83% | 0.24% |
| 3.3 | Green Tax | 906.781 | 992.864 | -8.67% | 0.38% |
| 3.4 | Taxes on permission to use goods or perform activities | 525.936 | 464.240 | 13.29% | 0.22% |
| 4 | Taxes on International Trade and Transactions | 787.377 | 509.978 | 54.39% | 0.33% |
| 4.1 | Customs and Other Import Duties | 787.377 | 509.978 | 54.39% | 0.33% |
| 5 | Other Taxes | 6,709.373 | 4,410.687 | 52.12% | 2.83% |
| 5.1 | Payable solely by business | 79.602 | 23.890 | 233.20% | 0.03% |
| 5.2 | Royalty** | 6,629.771 | 4,386.797 | 51.13% | 2.80% |
| B | Other Revenue | 11,474.515 | 11,544.267 | -0.60% | 4.84% |
| 1 | Property Income | 11,485.886 | 11,555.825 | -0.61% | 4.85% |
| 1.1 | Interest receipt from corporations | 2,528.968 | 2,562.471 | -1.31% | 1.07% |
| 1.2 | Dividend | 3,529.000 | 4,081.258 | -13.53% | 1.49% |
| 1.3 | Withdrawals from income of quasi-corporations | 5,274.944 | 4,843.437 | 8.91% | 2.23% |
| 1.4 | Miscellaneous Rent | 152.974 | 68.660 | 122.80% | 0.06% |
| 2 | Social Contributions | -11.371 | -11.558 | -1.62% | 0.00% |
| 2.1 | Health Contribution | -11.371 | -11.558 | -1.62% | 0.00% |
| C | Current Revenue from Government Agencies | 1,507.174 | 1,233.823 | 22.15% | 0.64% |
| 1 | Administrative Fees & Charges | 1,063.818 | 834.439 | 27.49% | 0.45% |
| 1.1 | Economic Services | 599.673 | 563.411 | 6.44% | 0.25% |
| 1.2 | Social Services | 138.291 | 136.872 | 1.04% | 0.06% |
| 1.3 | General Services | 325.854 | 134.156 | 142.89% | 0.14% |
| 2 | Sale of Goods and Commodities | 443.357 | 399.385 | 11.01% | 0.19% |
| 2.1 | Economic Services | 45.684 | 50.438 | -9.43% | 0.02% |
| 2.2 | General Services | 0.631 | 0.588 | 7.31% | 0.00% |
| 2.3 | Miscellaneous Revenue | 397.042 | 348.358 | 13.98% | 0.17% |
| D | Capital Revenue from Government Agencies | 426.520 | 421.931 | 1.09% | 0.18% |
| 1 | Capital Receipts | 426.520 | 421.931 | 1.09% | 0.18% |
| 1.1 | Economic Services | 426.520 | 421.931 | 1.09% | 0.18% |
| GDP (Source-MFCC) — 4th quarter update | 237,052.670 | — | — | — |
**After the opening of international borders on September 23, 2022, the Department of Immigration collected a total of Nu. 1,171.496 million in Sustainable Development Fee (SDF) and visa fees, of which Nu. 1,103.523 million was from US Dollar-paying tourists and Nu. 67.972 million from INR-paying tourists. The total number of tourists who paid in US dollars was 10,802 individuals. Assuming that all dollar-paying tourists paid visa fees at the rate of US$ 65 per person, the total visa fee collected from tourists was Nu. 57.357 million, while the remaining Nu. 1,046.166 million was considered SDF.
Source: Annual Financial Statements of the Royal Government of Bhutan for the Year Ended 30th June 2023.
Source: Annual Financial Statements of the Royal Government of Bhutan for the Year Ended 30th June 2023.
Tax Revenue — 2017 vs. 2022 Comparison
| Revenue Category | 2017 — Amount (Nu. M) | 2017 — % Total | 2022 — Amount (Nu. M) | 2022 — % of GDP |
|---|---|---|---|---|
| Total Revenue | 21,564.465 | — | 39,043.073 | 18.93% |
| Total Taxes | 21,564.465 | — | 25,843.052 | 13.27% |
| Direct Taxes / Income, Profits & Capital Gains | 12,345.794 | 57.25% | 13,325.760 | 6.18% |
| Corporate Income Tax | 8,170.299 | 37.89% | 10,063.607 | 4.42% |
| Business Income Tax | 1,276.903 | 5.92% | 1,298.427 | 0.72% |
| Personal Income Tax | 957.313 | 4.44% | 1,963.727 | 1.03% |
| Other Direct Tax | 39.342 | 0.18% | — | — |
| Royalties | 1,901.937 | 8.82% | 4,386.797 | 2.80% |
| Taxes on Property | — | — | 144.625 | 0.07% |
| Recurrent Taxes on immovable property | — | — | 8.986 | 0.00% |
| Taxes on Capital Transactions | — | — | 135.638 | 0.07% |
| Indirect Taxes / Goods & Services | 9,218.670 | 42.75% | 7,452.002 | 3.87% |
| Sales Tax / GST | 3,800.120 | 17.62% | 5,608.668 | 3.02% |
| Excise Duty | 3,579.663 | 16.60% | 386.229 | 0.24% |
| Green Tax | 909.652 | 4.22% | 992.864 | 0.38% |
| Taxes on permission to use goods / activities | — | — | 464.240 | 0.22% |
| Other Indirect Tax | 366.673 | 1.70% | — | — |
| Import / Customs Duty | 562.563 | 2.61% | 509.978 | 0.33% |
| Other Taxes (incl. Royalty) | — | — | 4,410.687 | 2.83% |
| Other Revenue | — | — | 11,544.267 | 4.84% |
| Property Income | — | — | 11,555.825 | 4.85% |
| Social Contributions | — | — | -11.558 | 0.00% |
| Current Revenue from Government Agencies | — | — | 1,233.823 | 0.64% |
| Administrative Fees & Charges | — | — | 834.439 | 0.45% |
| Sale of Goods and Commodities | — | — | 399.385 | 0.19% |
| Capital Revenue from Government Agencies | — | — | 421.931 | 0.18% |
| GDP (Source-MFCC — 4th quarter update) | — | — | 237,052.670 | — |
Social Insurance Schemes — 2017 vs 2022 Overview
National Pension & Provident Fund
Provident Fund
Rural Life Insurance
Group Insurance Scheme
Group Saving Linked Insurance
Member grouping, sum assured amount, and subscription rate with effect 1st July 2014
GSLI Premium Table where the Grades not compatible with Civil Servant