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News and Press Release from Ministry of Finance

Transfer of Surplus to RGoB for Financial Year 2019-2020

The RMA transferred Nu. 2,001 million as surplus to the Royal Government of Bhutan on 29th October, 2020. The RMA closed the books of accounts for the Financial Year 2019-2020 with a surplus of Nu. 1,769,391,841.67. Given the current situation of the Government experiencing decline in the revenue due to the pandemic, the RMA management and staff voluntarily surrendered performance linked incentives of Nu.15.20 million and retained earnings of Nu.216.40 million for the financial year 2019-2020 totaling to Nu.2,001 million as surplus transferred to Royal Government of Bhutan.

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Launch of National Credit Guarantee Scheme

Recognizing the private sector as a critical partner for the economic growth, the Government has always placed high importance on the private sector. Further, to enhance access to financing, the Government has launched the National Credit Guarantee Scheme (NCGS), as a counter cyclical policy measure during the COVID-19 pandemic situation on October 5th 2020. It will sustain investments by easing access to credit during the COVID-19 times. The NCGS is an intervention under which the Government guarantees a portion of the loans availed for establishing a viable business entity.

Growth in domestic credit is critical for investments, boosting domestic demand and generating employment. However, collateral requirement has been a major impediment, in particular, for aspiring entrepreneurs to avail financing. Therefore, the NCGS will alleviate this challenge of aspiring entrepreneurs. Under the NCGS, for availing loans, Cottage and Small category will not require collateral except 10% equity and startups under this category will be eligible for 100 percent debt financing under the NCGS.
Unlike practices across the globe, the medium and large categories will also be eligible for loans under the NCGS. However, under such categories, a loan financing up to 50% or Nu 30 million, whichever is lower will be guaranteed by the Government and the balance will be shared between the lender and the borrower.

In addition, CGS will also be available for up-gradation of businesses from CSI to medium and medium to large.
Therefore, the NCGS has been designed to be an inclusive instrument for all categories of industries.
The projects under the NCGS will focus on the following thrust areas of:

  • Boosting exports;
  • Reducing economic dependency by investing in import substitution-based projects;
  • Promoting innovation and technology; and
  • Creating jobs to absorb the displaced and unemployed.

Implementations:

  • The NCGS will be implemented under the overall guidance of a National Credit Guarantee Committee, which will be chaired by the Finance Minister with representative from key economic sectors;
  • The NCGS will be implemented in partnership with the State-owned Banks, namely Bank of Bhutan, Bhutan Development Bank and the National CSI Development Bank (NCSIDBL); and
  • A full time NCG Support Facility (NCGSF) will be established with the NCSIDBL, to provide all necessary support in availing loans and implementing projects under the NCGS.

Conclusion:

Under the COVID-19 Pandemic situation, the NCGS will go a long way in securing financing for the establishment of viable new business entities besides supporting the upgradation of existing businesses.
There will be challenges and risks in the journey of implementing the NCGS. Globally, monitoring and support mechanisms of such initiatives have been critical in determining the success of such schemes. While the government will ensure that and fulfill its responsibility to create the environment and platform, we urge the private sector to grab the opportunity, with responsibility. Through collaboration with responsibility, the investments that emerge as a result of the NCGS shall sustain economic activities, and turn aspirations into a reality for a resilient economy.

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Investments in GovTech is allowing Bhutan to reap benefits during COVID-19

Bhutan is proving that continued investments in GovTech solutions and reforms help build a strong resilient foundation to shocks like the coronavirus.

The country follows the unique concept of Gross National Happiness (GNH), which takes a holistic view and approach towards development, to measure prosperity. Under GNH, good governance is a key pillar and Bhutan scores higher on all six World Governance Indicators compared to other countries in South Asia and has shown continued improvements in these indicators over the last decade.

A critical component of this success is the steady progress in strengthening PFM policies and systems. The Government has actively taken steps to integrate its financial management information systems (FMIS) with other government systems for greater efficiency.

When the Government of Bhutan launched the country-wide electronic payments functionality through their electronic Public Expenditure Management System (e-PEMS) as part of the IFMIS development in 2019, they would learn in hindsight that this investment would prove immensely useful a year later as the world grapples with the COVID-19 pandemic. The e-PEMS facilitated smooth delivery of payments to vendors and civil servants and played a significant role in transferring relief payments to beneficiaries across the country, the latter under a scheme titled Druk Gyalpo’s Relief Kidu which means the Dragon King’s welfare, self-help and assistance.

Druk Gyalpo’s Relief Kidu is one of the most important measures undertaken under by the Royal Government of Bhutan to provide immediate relief to distressed individuals whose livelihoods have been impacted by the pandemic. Relief is not only limited to cash grants but also covers defraying the cost of living expenses such as shelter, food and medicine. Above all, the objective is to “boost morale and provide assurance of hope despite current hardships”.

Bhumika Monger of Lhamoidzingkha said, “While the future ahead is still bleak in terms of getting a job, I felt reassured with the relief kidu. One thing has become clear to me that no matter how worse the situation turns out to be, I can always count on His Majesty’s compassion.”

The e-PEMS became the frontline tool that enabled disbursement of cash grants from the Kidu relief fund of almost USD 2.15 million to 14,634 recipients as the first installment in April 2020. The disbursement through e-PEMS has greatly facilitated prompt electronic payments to the beneficiaries directly into their bank accounts.

By making this process entirely electronic, it also eliminated the need for physical contact helping contain the spread of the virus. Various e-government systems have been integrated with each another thus enabling a more cohesive government service delivery system platform eliminating the need for physical presence. These systems have also facilitated implementing Work from Home (WfH) directives from the Royal Civil Service Commission (RCSC) and making the social and physical distancing requirements much smoother.

As important as technological updates are, they need to be backed by the proper analog components such as legal reforms as well. The Public Finance Act of 2007 in Bhutan provided a legal framework that would allow the Ministry of Finance to use public funds for emergency expenditures. This framework was then submitted to Parliament which passed the Supplementary Appropriation Bill. The Ministry of Finance notified the procedures and how activities related to the pandemic would be implemented to ensure proper budgeting, timely disbursement of funds, proper accounting, and finally, audits of the COVID-19 related expenditures. This is an example where strong systems and good governance converge.

The citizens of Bhutan have fared better than others around the world during the crisis due to a combination of swift government actions, citizen participation and investments in GovTech that are paying off.

“Whatever I do, will not be able to repay the debt I owe my King, and the country for the free education, healthcare and now the relief kidu during this most difficult time of my life,” said Tashi, 55, from Pema Gatshel. “Every day, I pray for the good health and long life our King for all that our King has done and continues to do.Because of him, every night I can look forward to the next morning.”

Bhutan, however, has not yet seen the end of the situation yet. The government has taken further prevention and preparedness measures with an emphasis on critical medical services and advisories. Schools and public space closures, work from home and social distancing measures continue to be put in place. During such an unprecedented time, the public service delivery is critical, and it is clear that having an efficient and effective PFM system is all the more important. e-PEMS and other PFM reforms in Bhutan are being supported by the Public Financial Management-Multi-Donor Fund Program which is administered by The World Bank and funded by Austrian Development Agency and European Union.

As demonstrated in the above case in Bhutan, strengthened PFM systems helped the country to better manage the challenges created by the pandemic.

Author: Mr. Tshering Dorji, Director, DPA
Source: Word Bank, Blog

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Superannuation of employee (7-Jan-2020)

Name                           : Lungten Tshering
Position Title               : P2 A
Agency                : Regional Revenue & Customs Office,P/Ling 
Active Service             : 01/09/1984 to 01/01/2020

Mr. Lungten Tshering (EID No.8409010), Joint Collector, Regional Revenue & Customs Office, P/Ling under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1st January 2020.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 35 years 4 months service with utmost dedication and sincerity to the Tsa-Wa-Sum.

Name                           : Santa Kharka Chhetri
Position Title               : S2 A
Agency                        : Regional Revenue & Customs Office, Gelephu
Active Service             : 14/04/1986 to 01/01/2020

Mr. Santa Kharka Chhetri (EID No. 8604112), Tax Inspector II, Regional Revenue & Customs Office, Gelephu under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1st January 2020.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 33 years 7 months 22 days service with utmost dedication and sincerity to the Tsa-Wa-Sum.

“We wish them a happy retired life here after with his family.”

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6th Revenue Meet 2019 (25-Dec-2019)

The Department of Revenue and Customs, Ministry of Finance, Thimphu is organizing its 6th Revenue Meet from 25th – 27th December 2019 at the Regional Revenue and Customs Office, Gelephu with theme “efficient and effective services through digital transformation”.

As the Nation implements its 12FYP, the DRC as one of the important arm of the Ministry of Finance is meeting in Gelephu over next three days to take stock of issues and review our strategic plan and priorities with an objective to improve the service delivery to the taxpayers, facilitate cross border trade, contribute towards Government’s aspirations of economic self-reliance and ultimately play our part in promoting Gross National Happiness. The meeting will focus on innovative ideas, policy reforms, simplification and harmonization of procedures, enhance efficiency and effectiveness in the delivery of services to the taxpayers and discus on smart taxation systems for better economic prosperity.

It is also an opportunity for the Department, eight Regional Revenue and Customs Offices, Liaison and Transit Office and border checkposts to come together to share experiences from field, ensure uniform application of the rules before the onset of tax season from January 2020. A total of more than 70 key officials covering twenty dzongkhas are participating in this meeting.

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Superannuation of employee (16-Dec-2019)

Name: Sonam Dorji
Position: P2 A
Agency: Regional Revenue & Customs Office, Samtse
Active Service: 01/09/1987 to 01/12/2019

Mr. Sonam Dorji (EID No. 8709021), Joint Collector, Regional Revenue & Customs Office, Samtse under Department of Revenue and Customs Office has retired from the Civil Service with effect from 1st December 2019.

The Ministry of Finance would like to convey our sincere gratitude to him for rendering 32 years 2 months 21 days service with utmost dedication and sincerity to the Tsa-Wa-Sum.

“We wish him a happy retired life here after with his family.”

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Dedicated Civil Service Award 2019 (16-Dec-2019)

The Ministry of Finance had organized the Civil Service Award ceremony for the year 2019 on 11 December 2019 at NRDCL Conference Hall. The award ceremony was graced by Hon’ble Finance Secretary Dasho Nim Dorji.


Addressing the ceremony, the Hon’ble Secretary informed the gathering that the civil service award was initiated by the RCSC upon the command of His Majesty the King for the recognition of distinguished contribution and hard work of all the recipients. The Hon’ble Secretary further emphasized that it was an excellent opportunity for recipients and all other employees of Ministry of Finance to pay tribute and rededicate the commitment and loyalty to serve Tsa-Wa-Sum. The Hon’ble Secretary congratulated all the award recipients.

The total of 52 employees had  been awarded the service award under four categories;

  1. Lifetime Service Award : 7
  2. Gold (30 years)                 : 7
  3. Silver (20 years)               : 14
  4. Bronze (10 years)             : 24
Lifetime Service Award Recipients with Hon’ble Finance Secretary
30 years’ Service Award (Gold) Recipients with Hon’ble Finance Secretary
20 years’ Service Award (Silver) Recipients with Hon’ble Finance Secretary
10 years’ Service Award (Bronze) Recipients with Hon’ble Finance Secretary

***CONGRATULATIONS TO ALL***

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Press Release (5-Sept-2019)

THIMPHU CONSENSUS STATEMENT ON INTERNAL AUDIT SIGNED

The Hon’ble Finance Minister of Bhutan, Lyonpo Namgay Tshering emphasized the importance of internal audit in government and advised that internal auditors should move ahead from compliance audits and become trusted advisors to the management. The Finance Minister was speaking at the Regional Internal Audit Workshop held on August 27-
28, 2019 at Thimphu, Bhutan. The theme of the Workshop was “Government Internal Audit: Embracing the Changes and Innovations”. The two days’ workshop was attended by dignitaries from the World Bank, the Austrian Development Agency, IIA Malaysia, BPKP of Indonesia, ICAI India and participants from Royal Audit Authority, Anti-Corruption Commission, government internal auditors including participants from Indonesia, India (the states of Assam and Uttarakhand), Nepal and Sri Lanka.

The workshop was inaugurated by the Honorable Finance Secretary, Dasho Nim Dorji. He highlighted the importance of professional development as it is a highly technical profession and irrespective of facing the challenges of attrition rates and others, internal audit plays an important role in public financial management and good governance. He continued to state that strengthening the internal audit services keeps internal controls strong and helps the nation in ensuring the proper use of the limited public resources. The workshop discussed the use of technology in internal audit and contemporary audit methodologies including performance and risk-based audits. The participants were unanimous that the internal audit organizations particularly in governments face common challenges including: inadequate response to audit findings, attracting and retaining talent and capacity building of the internal auditors. Substantial efficiency gains could be achieved using technology tools for automating audit management and undertaking analytics. The representative from ICAI highlighted that Bhutan being a small country can embrace new technologies much faster as compared tosome of the large countries. It was emphasized that internal audit should not be mixed up with internal control and risk management, as the former is a function to ensure that management takes responsibilities of the latter. The Internal audit plays a crucial role in strengthening governance and it is important that all stakeholders including the auditee-management, internal auditors, the supreme audit institution and the anti-corruption agency should work together to strengthen the internal audit function, which is an important governance and leadership institution.
The CCA conducted this workshop with technical inputs from the Ernst & Young LLP and the World Bank. The workshop covered presentations by experts on various topics and ended with panel discussion on “Enhancing Relevance and Effectiveness of Internal Audit”.

The conference concluded with an agreement to continue the knowledge exchange efforts for mutual advancement of strengthening internal audit. For this purpose, the participants signed a Consensus Statement on Internal Audit including creation of a Joint Public Sector Internal Audit Community of Practice for the South Asian and East Asian countries as a platform for sharing experiences and ideas. Bhutan and Indonesia are also in advanced stages of signing a Memorandum of Understanding (MoU) for collaboration on strengthening of internal audit. RGoB is undertaking reforms to strengthen public financial management under the Pubic Financial Management Multi Donor Fund (PFM-MDF) administered by the World Bank and funded by the Austrian Development Agency and the European Union. This Regional workshop was organized under the internal audit component of the PFM-MDF Project, which is supporting the implementation of the RGoB’s Public Financial Management Reform Strategy.

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