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Bhutan’s recent lifting of a ban on car imports, while intended to spur economic growth, has inadvertently highlighted the country’s growing affordability and equality crisis. The policy, combined with high car taxes, threatens to exacerbate the exodus of Bhutan’s best professionals and widen an already worrying wealth gap.
Articles 7(13) and 9(1) and (2) provide for the State’s obligation to ensure the quality of life for all citizens and to promote conditions for achieving gross national happiness. These provisions reinforce the principle of non-discrimination and are consistent with our constitutional principles. However, the increasing lack of access to private transportation for most Bhutanese is in direct conflict with these ideals.
The stark reality of car affordability in Bhutan is worrying. According to the National Bureau of Statistics, the average monthly expenditure of a Bhutanese household is 52,813 ngultrums. By comparison, the average monthly salary in Australia in 2024 is about A$7,600 (about 423,000 ngultrums). The disparity is even more striking when the cost of a car is taken into account. In Bhutan, even a basic family car costs millions of ngultrums, often more than five years’ income for the average household.
Take the plight of professional civil servants, many of whom earn as little as N50,000 a month. Reports show that housing rent alone takes up around 37% of many people’s monthly income. Now consider that the cheapest car costs more than they earn in a whole year. For lower-paid civil servants and those working in other sectors, owning a family car means sacrificing years of entire income – something that is impractical for most.
The government’s claim of traffic congestion is misleading. Only one or two towns in Bhutan face traffic problems, while the rest of the country is becoming increasingly desolate and lacks adequate public transport services. BLSS 2022 data shows that only 5% of students use public transport, highlighting the urgent need to improve services.
Financial inclusion is another key area for reform. Data from the National Bureau of Statistics shows that bank loans are the most common source of funds (35.9% of loans), and financial inclusion is a major challenge. Many low-income Bhutanese have difficulty accessing affordable financing. Financial institutions are reluctant to provide any financial services without collateral such as land or property, which must be located in urban areas.
The 13th Five-Year Plan’s ambitious goal is to transform Bhutan into “an innovative and sustainable high-income country”, but under current conditions this goal seems increasingly out of reach. If the government is serious about achieving this plan, it must urgently reassess its vehicle tax policy. Faced with such economic realities, the government’s efforts to attract Bhutanese expatriates back home (especially from countries such as Australia) are likely to fail. More worryingly, the situation may accelerate the departure of more productive and professional Bhutanese in search of better opportunities abroad, as they find themselves unable to afford even basic amenities such as a small family car. The risk of Bhutan becoming a country dominated by young children and the elderly is real and imminent.
The government must act quickly to address the car affordability crisis. This requires a multifaceted approach—implementing an income-based car tax, improving public transportation across the country, and providing easy car financing options. If we can align policies with our constitutional mandate and social protection goals, Gross National Happiness can become a reality for all Bhutanese, regardless of economic status.
Sonam Tsering
Lawyer, Thimphu
Disclaimer: The opinions expressed in this article are solely those of the author
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