Corruption A Galore in Bhutan. Sad and Sadder nation.

1. Last week  front page national news was that the Labour Minister has been sent on leave and Anti Corruption Commission  investigating Ministry of Labour. I still cannot believe how the Labour Minister could find room for corruption in the process of sending youths for training or for jobs overseas.

2. This week front page national news are a red scarf officer is  alleged to have swindled insurance claims in collusion with the Insurance Management. So very sad but it looks like  normal happenings ( refer Nubri heist ) between Royal Insurance Corporation of Bhutan  and influential people.   

3. And a proprietor of 60 beds twin hotel buildings called Riverside Hotels ( Kuensel Photo today ) in Thimphu  had imported hotel furnishings worth over 12 million ngultrums exempted from tax and custom duties. But when post clearance audit was carried out, half the imported furnishings were not physically available in the hotels. This means the missing goods could have been sold in the open market to make huge profit.

Now will the ACC decide to investigate? According to Kuensel, ACC is just considering whether to act or not to act. Sounds Great for big Corruptions.

Here is a scenario:

A hotel enjoys exemption of custom duties and sales tax on furnishings and equipments imported for its utilisation. Now a hotel owner say imports 20 millon ngultrums worth of goods that are totally exempted of custom duties  and sales taxes. Then half the goods are sold in the open market fetching a huge windfall profit that could amount to 20 million or more ngultrums. Thus a hotel is furnished without incurring any cost by the hotel owner.  Just good high level connection and clever manipulation of loop holes. 

And what is so sweet is that tourist class hotels are granted income tax free grace periods of 5 -10 years. And even later in filing income tax, such a hotel owner would be showing the furnishings that were done actually free of cost as expenditures and recouping the same in the books of accounts thus reducing the amount of payable income tax by falsifying expenditure. So such a  hotel owner could double or  triple the profit and no income tax paid.  As the saying goes " laughing all the way to the bank " at the expense of the nation.