Rethinking Bhutan's Vehicle Taxation

Rising vehicle prices have become a bone of contention, sparking debates on the vehicle taxation policy.

Paradoxically, this controversy unfolds alongside growing concerns over the increasing number of vehicles and depletion of foreign currency reserves.

With over 128,000 vehicles nationwide, Bhutan averages one car for every six people. However, this statistic warrants deeper consideration when shaping vehicle taxation policy, as it masks significant inequities. For example, 55% of vehicles are concentrated in Thimphu, and an overwhelming 93% are located in Thimphu, Phuntsholing, Samdrupjongkhar, and Mongar. This indicates that vehicle ownership in Bhutan, as in many other countries, is heavily skewed toward middle and higher-income groups.

In reality, many households in Bhutan still do not own a car, yet it is increasingly common for families in middle and high-income groups to own multiple vehicles. For example, in urban centers like Thimphu, it is not unusual for each family member to have their own car, and this trend is expected to continue.