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The BITS project is fully funded by the government and costs more than Ngultrum 1 billion
Thupten Sangpo
Due to unforeseen delays and technical glitches, the Department of Revenue and Customs (DRC), under the Ministry of Finance, outsourced the development of the Bhutan Integrated Tax System (BITS) to Data Torque Limited, a leading New Zealand technology company.
BITS is expected to be fully operational by 2029, according to the agreement signed yesterday between DRC and Data Torque Limited.
Among three international technology companies Participating in an international competitive bidding process, Data Torque Limited was selected for its expertise in customised Commercial Off-the-Shelf (COTS) solutions.
An independent evaluation technical committee consisting of officials from the Development Research Center of the State Council, the Ministry of Procurement and Property, and the government’s Ministry of Science and Technology evaluated the tender documents.
According to the State Administration of Taxation, the system will feature real-time data processing, automatic tax declaration, electronic invoices and a taxpayer-friendly interface.
The construction of BITS will take five years, including a three-year implementation period and a two-year guarantee period or pilot period.
The project will be implemented in three phases – development of Goods and Services Tax (GST) within 12 months, non-tax and withholding tax within the next six months and direct taxes within the next 12 months.
The BITS project is fully funded by the government and costs more than Ngultrum 1 billion.
Sonam Jamtsho, director general of the DRC’s Tax Administration, said the project will lead to changes in tax administration, expand the taxpayer base, enhance domestic resource mobilization and improve the overall quality of taxpayer services.
He said the government has placed high priority on the successful implementation of BITS despite resource constraints and economic challenges. “The government recognises that a modern and efficient tax system plays a key role in supporting the country’s long-term development objectives.”
Sonam Jamjo said BITS is crucial as it is necessary for the implementation of GST and will help expand the taxpayer base.
The Goods and Services Tax Act, 2020 has boosted A single 7% tax based on consumption will replace the sales tax and revise the excise tax system.
Sonam Jamtsho added that BITS will also improve compliance and encourage greater participation from businesses and individuals, Improve taxpayer services through better interfaces and seamless integration with other government agencies, providing a one-stop platform for all taxpayer services.
BITS will replace the RAMIS system, providing a more efficient and effective tool for tax administration.
Bill Chatwin, Director of Data Torque Limited, said that taxes enable governments to collect necessary government revenues and a well-functioning tax system is vital to any country’s economy and society. “A reliable tax system is essential to building local communities and making countries more resilient to external shocks”.
Kuenzang Thinley, BITS and GST project specialist for the Democratic Republic of Congo, said that currently tax-related systems are fragmented, such as eCMS, property tax, etc. “BITS will integrate all these systems.”
Earlier, as per estimates for 2017-18, the government expected to recover an additional N3 billion through the implementation of BITS.
DRC expects revenue to grow as Based on estimates for 2022-23.
Commissioner Kuenzang Thinley said the system could address the country’s short-term borrowings in the form of treasury bills as it would achieve a steady monthly cash flow.
During the 2022 summer session, the National Assembly passed the Bhutan Goods and Services Tax (Amendment) Bill, 2022, which is scheduled to be implemented once the tax system is ready.
The GST Bill, 2020 will come into force from the date when BITS is ready and Parliament approves its implementation.
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