What is the tax on cars in Bhutan?

Car Tax Structure in Bhutan

Bhutan’s tax system for vehicles is designed to cater to the diverse needs of different income groups. The government has maintained a differential tax structure to ensure that those with lower incomes have access to affordable vehicles.

Taxes for Low-to-Middle Income Earners

Vehicles with cylinder capacities ranging from 1,000 to 1,200 cc are primarily used by individuals and families with low-to-middle incomes. These vehicles are subject to the following taxes:

• Customs Duty and Sales Tax: 45%
• Green Tax: 10%

The Customs Duty and Sales Tax is levied on the imported value of the vehicle. The Green Tax is imposed as an environmental charge to promote sustainable transportation.

Taxes for Other Vehicles

Vehicles with larger engine capacities or those intended for commercial use are subject to higher taxes. The tax rates vary depending on the type and size of the vehicle.

Conclusion

Bhutan’s tax structure for vehicles is designed to balance affordability and environmental considerations. By maintaining stable tax rates for low-to-middle-income earners, the government ensures that access to vehicles is not restricted to the wealthy. Additionally, the Green Tax encourages individuals and businesses to opt for more environmentally friendly transportation options.