Bhutan Trade Statistics in

Merchandise 1

Presentation Outline

Part I: Background Part II: Trade Statistics

Part III: Challenges Part IV: Way Forward

Bhutan Trade Statistics (BTS)

2

Organizational Structure

COLLECTOR CUSTOMS & EXCISE

EXCISE SECTION

LTO TARIFF &

TECHNICAL SECTION

PROCEDURES & FACILITATION

COMPLIANCE & ENFORCEMENT

INTERNATIONAL & CAPACITY

BUILDING AFFAIRS

UNITS: 1.HS & BTC 2.TARIFF 3.VALUATION & ROO 4. ADVANCE RULINGS 5.BTS 6.ICT

UNITS: 1. CAPACITY BUILDING 2.RESEARCH & DEVELOPMENT 3.INTERNATIONAL AFFAIRS 4. HUMAN RESOURCES

UNITS:

1.ENFORCEMENT 2.INFORMATION & INTELLIGENCE 3. INVESTIGATION 3.RISKMANAGEMENT 4.PCA

UNITS: 1.LEGISLATION 2.PROCEDURES 3.TRADE FACILITATION 4. CLIENT SERVICE PROGRAM 5. WCO INSTRUMENTS& TOOLS

UNITS: 1.DOMESTIC EXCISE 2.DUTY FREE SHOP 3.EXISE TARIFF 4.EXCISE DUTY REFUND 5. EXCISE LEGISLATION

PROGRAM MGT. UNIT

UNITS: 1. PMU-SASEC-TFP 2. RAMIS - ICT 3. NTTFC SECRETARIAT 4. CUSTOMS REFORM & MODERNIZATION

DIRECTOR, DRC

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Background

2002 2005 2007 2012

- Limited users of Trade data - Quality of data was poor

BACS HS, 2002

Data Collection

Eight RRCO’s

TIS Unit

Data Collection

Data Verification

Data Validation

Publication (Provisional)

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BTS Report Format

BTS

BoT

Check post

Top Ten

Partner countries ranking

Section, Chapter

and commodity

Partner country

and commodity

Commodity and Partner

Country

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Balance of Trade

A. Trade including Electricity

68,037

56,885 53,273 53,094

48,698

35,229 35,585 31,853

28,420 31,486

-32808

-21300 -21420 -24674

-17212

-40,000

-20,000

0

20,000

40,000

60,000

80,000

2015 2014 2013 2012 2011

Import Export Balance

B. Trade excluding Electricity

67,788

56,566 53,050 53,081

48,687

23,105 24,951 20,626 19,295 21,044

-44683

-31615 -32424 -33786

-27643

-60,000

-40,000

-20,000

0

20,000

40,000

60,000

80,000

2015 2014 2013 2012 2011

Import Export Balance

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TRADE VOLUME

TRADE

INDIA 3rd COUNTRIES India 3rd Contry

2013 2014 2013 2014 2015 2015

IMPORT 43,889 47,847 9,383 9,036 53740 14296

EXPORT 28,979 31,801 2,873 3,783 31801 3427

BALANCE (14,910) (16,043) (6,509) (5,253) (21939) (10868)

Deficit: 2013 ( 14910 + 2873 = 17783 Deficit 2014 ( 16043 + 5253 = 16043 Deficit 2015 (21939 + 10968 = 32807

NU. (million)

Import Profile

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Animal Products (2.85 bn)

4%

Vegetables (3.52 bn)

5% Edible Oil (0.99 bn)

1%

Minerals (12.46 bn)

18%

Food stuffs (2.65 bn)

4%

Plastic (2.67 bn)

4%

Chemicals (2.8 bn)

4%

Base Metal (10.24 bn)

15%

Machinery & Electrical

(13.89 bn) 21%

Vehicle (9.52 bn)

14%

Wood (1.7 bn)

3%

Others (4.49 bn)

7%

Export Profile

10

Vegetable (2.42 billion)

11%

Mineral products (5.53 billion)

24%

Chemicals products

(2.64 billion) 11%

Base metal (10.35 billion)

45%

Others (2.17 billion)

9%

Size of the economy and structure in 2014

16.77

40.55

42.68 Primary

Secondary

Service

• Size of the economy: Nu. 119545.7 million

• Growth rate: 5.46 %

• Primary sector growth: 2.37 %

• Secondary sector: 3.06 %

• Ser vice sector: 8.91 %

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Challenges

• Zero rated Goods -Undervalue

• High Tariff - overvalue Valuation

• Restricted Goods

• Prohibited Goods Smuggling

• Porous border -Smuggling Informal Trade

• Standalone – Late data System

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INDIRECT TAX SLAB Sl.

No.

BST (%) Excise Duty on

AWP liquor (%)

1 0 0 0 30% – Premium Brand

2 5 5 5 60% - Mid Brand

3 10 10 10 75% - Ordinary Brand

4 15 15 15

5 20 20 20

6 30 30 25

7 50 50 30

8 100 100

*** SAARC Countries – Preferential Tariff applied.

Tariff rates are based on the nature of items and its utility in the importing

countries. Fiscal policy to curb imports or exports.

Way Forward

Legislation

WTO Valuation Method

(Automation)

Web-based system

Non-Intrusive inspection

Trade facilitation

Simplified customs system 14

Legislation

Sec. 20

• Classification based on Bhutan Trade Classification (BTC), Customs Tariff and Sales Tax Schedule in force

Sec. 21 • BTC shall be in accordance with the HS Nomenclature

Sec 22 • Creation of National Codes beyond six digit

Sec. 120

• Advance Ruling on classification

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Tariff Policy. - Guided by Economic and social and Environmental Policy of the Govt. (EDP and Fiscal Incentive). - Nature of use – Raw materials and machineries –Tax exempted. - Alcohol and luxury items are taxed high. - Bilateral and multilateral agreements -To correct Balance of trade - To curb consumerism. - Promote investment. -

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Automation

• Online payment & declaration

• Advance ruling in classification

• Valuation database for Post Clearance Audit

• Dynamic data reports

• Data anlysis

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