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We acknowledge and appreciate the effort being made by the government to control the growth in the number of motor vehicles by increasing taxes and duties significantly with the aim to contain the economic and environmental effect.

Taxes and duties: The only way to decrease vehicle imports?

We acknowledge and appreciate the effort being made by the government to control the growth in the number of motor vehicles by increasing taxes and duties significantly with the aim to contain the economic and environmental effect.

While it is seen to be helping the government to increase the country’s revenue from taxes and duties, the policy measures appear to be effective in controlling the growth in number of vehicles which was understood to be main objective of increasing taxes and duties.

As per the Ministry of Information and Communication’s Annual InfoCom and Transport Statistical Bulletin 2016, the number of vehicles has increased by over 107 percent in less than a 10 year period between 2008 and February 2017. Imagine what would happen in another 10 years.

Yes, the number of vehicles will grow with the increase in population and it would be beneficial to the country if heavy and medium category vehicles that help in capital formation grow at a relatively faster pace than other categories of vehicles, as its growth would indicate an increase in economic activities.

While these types of vehicles have grown by 90 percent between 2008 and 2015, the total number of such vehicles was 10,048 comprising only about 13 percent of the total number of vehicles in 2015.  However, light vehicles have increased by almost 97 percent to 47,734 constituting about 63 percent of the total. This alarming growth in light vehicles indicates either that our public transport system has not improved or our citizens prefer to own a car despite improvements in the public transport system.

We are seeing the multiple adverse effects of the increase in vehicle numbers by the day affecting the environment, health and economy in particular. A tangible effect is seen in the outflow of foreign currency to the tune of Nu 1.70 billion in 2016 on account of fuel imports let alone the import bill of vehicle purchases.

Yes, an increase in taxes and duties is one way of containing the vehicle growth, but to make it more effective there should be some supplementary measures. I personally feel, although it would be an unpopular measure in the eyes of the public, that an increase in the annual renewal and fitness fee of vehicles as per the age of the vehicle be introduced. (See Box)

I sincerely believe this kind of fee structure would discourage people to own old cars which emit more harmful gases than relatively new cars in general and eventually old cars would find its way to the dumping yard. The only issue here would be setting up of recycling plants as in advanced countries otherwise dumping yards will be filled with old cars only to create further problems. Therefore it is suggested that the government should also think of setting up a recycling plant which will not only provide raw materials to other economic activities but will also create more employment opportunities in the country.

Contributed by Dorji Penjor

Phuentsholing

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