The proposed Income Tax Bill 2025 is expected to cost the government Nu 5.57 billion in lost revenue, with 95% attributing it to state-owned enterprises. Significant changes include removing taxes on intercorporate dividends, reducing corporate income tax rates, and merging business and personal income. Lyonpo Lekey Dorji outlines economic liberalization strategy, addressing concerns over foreign labor taxation, despite no prior taxation on construction workers.
The proposed legislation includes rationalisation of non-resident withholding taxes, online and digital businesses taxation, and a 10% fixed deposit interest tax on retirees. Lyonpo proposed taxing fixed deposits to lower lending rates and incentivize capital formation, while highlighting social relief measures like increased educational expense and disability deductions. Through a parenting tax relief, the Bill also adds new deductions for larger families and first-time homebuyers. According to Lyonpo Lekey Dorji, the Income Tax Bill will give people more money because of its many deductions.