After more than five years of protracted development and mounting public expense, Bhutan’s long-awaited Integrated Taxation System (BITS) remains unfinished, stalling the introduction of the Goods and Services Tax (GST) and triggering stern rebukes in a joint parliamentary sitting today.
Originally contracted in June 2020 to Thimphu Tech Park Limited, BITS 1 was designed to modernize revenue collection and pave the way for GST. Despite multiple deadline extensions and a development cost exceeding Nu 119 million, the system never materialized. In April 2022, the government terminated the contract, citing persistent non-delivery, but by then the GST rollout—enshrined in a 2020 bill—had already been deferred indefinitely.
In the intervening years, the Ministry of Finance has commissioned a successor project, BITS 2, awarding development to a New Zealand–based technology firm with a budget of over USD 12.16 million. Officials insist this version will be ready in time to support a planned GST launch in January 2026.
However, today’s joint session, convened to review the Public Accounts Committee’s findings from the 2010–2023 Annual Audit Reports, revealed widespread frustration over the lack of accountability for BITS’s failures and public financial losses. MPs from across the aisle questioned whether the substantial investment in the first system might yet be salvaged or if the funds were irretrievably lost.
“My confusion is whether the Nu 119 million has been wasted with no outcome, or if the amount spent will be incorporated and put to use in the implementation of the Goods and Services Tax,” pressed Lhendup Wangdi, MP for Bji-Kartshog-Uesu, Haa. “The committee mentioned they could not take accountability measures. Is it because components of BITS 1 will still be used? Please clarify.”
Echoing these concerns, Rinchen Wangdi, Bartsham-Shongphu representative from Trashigang, lamented, “This money was spent within the country. Some people received and disbursed it, with clear agreements and deadlines. Yet there’s been no result. Who is responsible?”
Phuntsho Rapten of the Public Accounts Committee suggested that if elements of the initial system are reusable, their value should be assessed. “But if the entire Nu 119 million has been wasted, the Royal Audit Authority has already identified who is accountable,” he noted.
In response, Speaker Lungten Dorji instructed the Royal Audit Authority to undertake a special audit of BITS 1. The audit will determine which modules might be integrated into BITS 2 and quantify losses on obsolete components. “A proper study is needed,” the Speaker declared. “We must know how much of the money spent on the previous system will be integrated into the current one, and how much has been wasted.”
The Royal Audit Authority is expected to present its findings during the summer session next year, guiding Parliament on both financial stewardship and the long-overdue implementation of GST. In the meantime, public scrutiny of project oversight and project management protocols promises to intensify as Bhutan aims to modernize its tax framework without further delay.
