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Tax that second car

The Royal Monetary Authority had reduced the amount of money people can borrow from the banks to buy a car. Now they can avail only 30 percent of the total cost.
The decision of the central bank is received with mixed feeling. The rich are laughing at the decision, the poor are thinking why and many are thinking why now. The move is good even if it is late.
Considering the car buying frenzy, banks should not dish out loans. This is because loans are only increasing consumerism and adding more vehicles on our limited roads. If the central bank is serious about curtailing the number of cars imported, which is now almost one car a every hour (2016 figures), the could have been more serious. It is not the responsibility of the central bank, but with fiscal policy, they can help authorities to curtail the frenzy.
There was a ban on car loans. We are not sure if that proved any helpful, but we can safely surmise that it could have made cars dearer for the average Bhutanese wanting town a car. Car was a luxury not long ago. It has become, or at least it seems, a necessity. High on the list of any Bhutanese is buying a car. University graduates, as soon as they get a job, have to own one. Most parents feel that their children should drive one to office. It is still a social status.
Given the reliability and convenience of public transport, a car can be considered a necessity today especially for office goers. Travelling by taxi is expensive and cheaper public transport has a long way to go to attract the wanna-be car owners.
At the same time, the number of vehicles in the country should be controlled. We are buying too much. With 88,2227 vehicles on our road, it is almost one vehicle for eight Bhutanese. Going by this, we are a rich country. A half of this is in Thimphu, which has become a traffic and parking nightmare. Walking to office or shopping is easier than driving -so say many – indicating the condition of our roads and vehicles.
Given the uncontrolled growth of vehicles imported, this paper suggested controlling vehicle numbers through taxation policy. If owning a car has become a necessity for whatever reasons, we could tax the second, third and the fourth car. A fourth car a family owns could be taxed 100 percent or even higher to discourage buying.
Buyers will have ways to fine tune their trick around the rule, but it is not rocket science to not know who is buying what or how many. By levying heavier tax on the second or third car, consumers would think twice while they can buy the first car.
Tax is sensitive, especially when we have elected governments. It will be an unpopular decision. Not many governments will do it. Not at all when it is election year. But a good government will look at the larger national interest.
The interest today is improving public transport, infrastructure or curtailing the craze for car through taxation policy.

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