The Department of Macroeconomic Affairs in the Ministry of Finance was formally inaugurated by the Hon’ble Finance Minister, Lyonpo Namgay Dorji on 26th September, 2016. The inaugural ceremony was attended by officials from the Ministry of Finance and RCSC.
The new Department will be the main coordinating agency which is responsible for formulating and monitoring macroeconomic policies and programs. The Department shall advise the Government on macroeconomic and public finance management. The Department will support MoF to fulfill its mandates with regard to macroeconomic coordination and facilitation as enshrined in the Public Finance Act.
Objectives & Structure of Department of Macroeconomic Affairs
1. The Ministry of Finance has officially launched the Public Debt Policy 2016 on 7th September, 2016 at Tashichhodzong, Thimphu.
2. The Government has recognized the need for a comprehensive public debt policy to proactively guide its investment and ensure that financing decisions are prudent and public debt is maintained at a sustainable level. Following the directives from 40th Lhengye Zhungtshog Session held on June 24, 2014, the Policy was drafted by a Committee comprising of representatives from Ministry of Finance, Royal Monetary Authority, Gross National Happiness Commission Secretariat, National Statistics Bureau and Department of Hydropower and Power Systems.
3. The Policy is governed by the Constitution of the Kingdom of Bhutan, the Public Finance Act of Bhutan 2007, the Audit Act of Bhutan 2006 and the Royal Monetary Authority of Bhutan Act 2010, and amendments thereof.
4. This Policy extends to all Public and Publicly Guaranteed External and Domestic Debt of Bhutan. However, given the nascent stage of development of domestic debt market, the thresholds in this Policy shall apply only to External Debt, until such time the thresholds for domestic debt can be determined to compliment this Policy. The broad guiding principles for raising debt are categorized by type of liability (direct or contingent) and by sector of borrower (General Government, Public Corporations and RMA).
5. Given the unique nature of Bhutan’s debt dynamics, which is primarily driven by investments in the development of hydropower, the thresholds set out in this Policy have been framed in a manner to allow Bhutan to continue to pursue and optimize its hydropower resources. As such, the draft policy provides debt thresholds for two categories of debt viz., (i) Non-hydropower debt (ii) Hydropower debt.
6. The threshold for Non-hydro External Debt, inter alia, shall not exceed thirty-five percent (35%) of GDP during a five- year period. Similarly, for Hydropower External Debt, inter alia, the ratio of hydropower debt service to hydropower export revenue shall be maintained within forty percent (40%), in any given year. The overall threshold for Total External Debt however is, provided in terms of Debt Service Ratio (ratio of annual debt service obligation to exports of goods and services) which shall not exceed twenty-five percent (25%).
7. The thresholds are proposed to reduce the undue debt burden that might arise from indiscriminate borrowing for social projects which do not necessarily generate financial returns. Other considerations are aimed at to ensure fiscal discipline and avoid ad-hoc, short-term borrowing which are generally costly.
8. The Policy was formally approved by Lhengye Zhungtshog during the 109th Session held on 2nd August 2016.
At the invitation of the Government of Islamic Republic of Pakistan, Royal Government of Bhutan participated in the Eight Meetings of the SAARC Finance Ministers and Secretaries in Islamabad, Pakistan. The Finance Ministers’ Meeting was held on 26th August 2016 preceded by the Finance Secretaries’ Meeting on 25th August 2016.
The main objective of the SAARC Finance Ministers was to review the processes towards establishment of the South Asian Economic Union (SAEU).
In this regards, the Islamabad Meeting reviewed the status on economic and financial cooperation including investment, progress in customs cooperation, regional economic integration and SAARCFINANCE. The Meeting also assessed the overall performance economic outlook of each Member State and discussed opportunities/challenges for South Asia.
As the SAARC Finance Ministers in their capacity as the Governing Council of SDF, discussed measures to strengthen SDF and expedite the operationalization of Economic and Infrastructure Windows.
SAARC Finance Ministers normally meet once a year. The Ministers also meet in informal settings on the sidelines of annual meetings of the World Bank and Asian Development Bank. Bi-lateral Meetings between Member States are also organized, when requested.
His Excellency Lyonpo Namgay Dorji, Finance Minister led the Bhutanese delegation to the Eight Meeting of SAARC Finance Ministers. The delegation comprised of senior officials from the Ministry of Finance and Ministry of Foreign Affairs.
The next SAARC Finance Ministers’ Meeting is scheduled in Afghanistan.
The signing of the Departments and the Secretariat APA for FY 2016-17 took place on 4th August, 2016 at the Ministry’s Conference Hall in the Tashichhodzong. The meeting was chaired by the Hon’ble Lyonpo which was attended by Dasho Secretary, Director General, Directors, chiefs and other officials of the Ministry.
The Hon’ble Lyonpo reminded everyone in the meeting about the significance of APA in increasing the performance of the Ministry while delivering its services. The Hon’ble Lyonpo commended the hard work done by the Departments and Divisions in the Ministry in the past and such hard work should be continued further in achieving the targets in the new FY 2016-17.
The APAs were signed between Dasho Secretary and Heads of the Department and Chiefs of Divisions under the Secretariat in presence of the Hon’ble Lyonpo.
Signing of the Ministry’s APA for FY 2016-17 between Hon’ble Lyonpo and Dasho Secretary
Signing of Department of National Properties APA for FY 2016-17 between Dasho Secretary and Director General Nima Wangdi
Signing of Department of Revenue and Customs APA for FY 2016-17 between Dasho Secretary and Director Yonten Namgyel
Signing of Department of National Budget APA for FY 2016-17 between Dasho Secretary and Director Lekzang Dorji
Signing of Secretariat APA for FY 2016-17 between Dasho Secretary and Chiefs
Dasho Nim Dorji was appointed by His Majesty the King as the new Finance Secretary on 14th July, 2016.
Prior to his appointment, Dasho served as Director General of Department of Agriculture in the Ministry of Agriculture and Forests. He also served as the Joint Secretary in the Ministry of Finance.
Dasho started his career in 1989 as trainee officer in the Ministry of Finance. He became the Director of Department of Public Accounts in 2007 and the Joint Secretary of the Ministry of Finance in 2012.
He holds a Master’s in Business Administration from the University of Canberra, Australia.
Dasho Nim Dorji (second from the right) with other Secretaries appointed by His Majesty the King.
A delegation led by Mr. Mahender Singh, Director General of Directorate General of Performance Management, (Customs and Central Excise), Government of India (GoI) visited Bhutan for verification and quantification of the Excise Duty Refund claim of RGoB for the year 2015 from 19th to 30th June 2016. The meeting between the delegates of RGoB and GoI was held on 29th June 2016 to discuss and finalize the Excise Duty Refund. The Bhutanese delegation was led by Mr. Yonten Namgyel, Director, Department of Revenue and Customs. The total excise duty refund agreed for the year 2015 is Nu. 2,916,923,214 (Two Thousand Nine Hundred Sixteen Million, Nine Hundred Twenty Thousand, Two Hundred Fourteen) only.
The refund amount of excise duty for the year 2015 has increased by Nu. 973 million as compared to Excise Duty Refund for 2014. The increase is attributed to the improved recording system of the Department of Revenue and Customs and due to maintenance of documents in a manner desired by the GoI delegates. The increase in the excise duty refund is due to the increase in the import of HSD and MS petrol. The import of HSD and MS Petrol from India has increased by 4551.6 KL and 2364.40 KL respectively. The Excise duty has increased by 534.3 million as compared to 2014 ED claim.
Further the import of vehicles has increased by 4156 vehicles as compared to imports for 2014 from 2919 to 7075 in 2015. The increase in import has attributed to the increase of Excise duty by 348.8 million from 112 million in 2014 to 460.8 million in 2015.
Although most of the commodities are subject to levy of excise duty in India, there are specific exemptions issued by way of notifications by GoI on goods of special interests (petroleum products, metallic waste products, food items, tools, spares and accessories, medicine and medical equipments) etc. Furthermore, since imports made by Hydro Power Projects in Bhutan are exempted from excise duty at source, no excise duty refund claims are made for imports made by these projects.
Apart from the above issue, other issues of mutual interests were also discussed. The GoI delegation called on the Hon’ble Prime Minister and Hon’ble Finance Minister on 27th June 2016.
His Excellency Namgay Dorji, the Hon’ble Finance Minister & Governor for Bhutan in Asian Development Bank (ADB) attended the Annual Meeting of ADB Board of Governors at Frankfurt, Germany from May 2-5, 2016. The theme of this year’s meeting was “Cooperating for Sustainability”. His Excellency attended the Governors seminar and roundtable meeting and attended the Main Business Sessions. His Excellency presented his Governors Statement in the Second Business Session.
His Excellency and delegation also attended the Tenth Informal Meeting of SAARC Finance Ministers which was held on May 3, 2016 on the sidelines of the Annual Meeting. The theme of this year’s Informal Meeting was “Financing Development of Economic Corridors in the SAARC Region”.
His Excellency also held bilateral meetings with the ADB President Takehiko Nakao and the Indian Finance Minister Shri. Arun Jaitley. He also held other meetings with Multilateral Development partners on the sidelines of the Annual Meeting.
Over 3000 senior government officials from ADB Developing Member Countries, business leaders, journalists, academics, and representatives from civil society and development organizations and ADB senior management and staff attended this year’s Annual Meeting.
Hon’ble Lyonpo with the ADB President Mr.Takehiko Nakao at the Annual Meeting
Royal Bhutan Lottery Limited was officially launched by the Hon’ble Finance Minister on 8th April 2016 in Phuentsholing. The launching ceremony was attended by the board directors of RBLL, representative from various Government sectors and business communities based in Phuentsholing.
The Royal Bhutan Lottery Limited has been established as a State Owned Enterprise under the Ministry of Finance. A multi-sectoral board of directors chaired by Finance Secretary with senior representatives from the Ministries of Foreign Affairs, Home and Cultural Affairs and Economic Affairs has been formed.
The Hon’ble Finance Minister, Lyonpo Namgay Dorji led the Bhutanese delegation to the First High Level Follow – up Dialogue on Financing for Development in Asia and the Pacific Region which was held on 30th – 31st March 2016 in Incheon, the Republic of Korea. The objective of this dialogue was to discuss the strategies for the implementation of the Agenda in Asia and the Pacific Region, with a focus on six key issues; regional tax cooperation, capital markets, institutional investors, financial inclusion, climate finance and South-South cooperation and triangular development cooperation. This dialogue provided policy recommendations for a regional plan of action on financing for development.
The event was co-hosted by the United Nations Economic and Social Commission for Asia and the Pacific (UN ESCAP) and the Ministry of Foreign Affairs of the Republic of Korea. It was also attended by high-level representatives from other countries, including Ministers of Finance, Foreign Affairs and Development Cooperation, as well as all relevant institutional stakeholders, non-governmental organizations and business sector entities.
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Dasho Nim Dorji was appointed by His Majesty the King as the new Finance Secretary on 14th July, 2016.
