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Bhutan hoteliers demand exemption from tourist tax for border town visitors

by | Sep 9, 2022 | South Asia

India and Bhutan share a 699-km long border that runs along the states of West Bengal, Assam, Arunachal Pradesh and Sikkim.
"Bhutan - Hotel in Samdrup Jongkhar" by othermore (other) is licensed under CC BY-SA 2.0.

Hoteliers and guides in Bhutan have demanded an exemption from a tourist tax as the Himalayan country reopens to international visitors from September 23 after keeping them away for more than two years following the coronavirus outbreak.
A request for exemption from the Sustainable Development Fee (SDF), introduced to preserve the local environment, for tourists visiting for a day or spending a night in the border towns was submitted to the Tourism Council of Bhutan (TCB) on September 5. The levy was steep and could deter tourists, they said.
Bhutan’s border towns get a lot of tourists from India, Nepal and Bangladesh and people who visit the country on business usually stay for a weekend. Many foreign tourists visiting Nepal or India also cross the border for a day’s visit.
India and Bhutan share a 699-km long border that runs along the states of West Bengal, Assam, Arunachal Pradesh and Sikkim.
Tourism is a big part of Bhutan’s economy and accounts for 6% of the nation’s gross domestic product.
In 2019, 315,599 tourists visited Bhutan, earning the tourism industry $ 225 million.
In July 2022, the Bhutan government decided to charge an SDF of $200 (around Rs 16,000) a person per day, an almost a three-fold increase from $65.
For Indians, SDF remains at 1,200 Bhutanese ngultrums—one ngultrum is equal to a rupee—but the fee will be revised at a later date.
The Bhutan government says the SDF is a development fee for the welfare of the ecology as well as the locals.
The tax has been levied to offset the industry’s carbon footprint and also enhance the skills of those part of the tourist trade, says the government. Political analysts, however, say Bhutan is facing an economic crunch and wants to earn precious foreign exchange through SDF.
The hoteliers said the new rules, introduced in July 2022, left them confused. They asked the government for clarity so that they could upgrade the business or exit.
The tourists from the region usually move in large groups, the hoteliers said. The procedure for seeking a permit to travel or visa should be clearly laid out.
TCB officials, who met hoteliers, guides and tour operators, said the council was working and revising the requirements. It was talking to all the stakeholders to smoothen the process.

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