Y2K Brings the IRS to Bhutan

Updated May 25, 2018 | Infoplease Staff

This article was posted on April 8, 1999.

Strongly traditional Bhutan, one of the world's last bastions against taxation, has fallen. Thank goodness for Saudi Arabia. Related Links Profile of Bhutan Encyclopedia: Bhutan Taxation History of the Income Tax in the United States

Representation without taxation has ended in Bhutan. For the first time in its history, the people of this tiny, isolated Himalayan kingdom will be subject to income tax.

A largely Tibetan Buddhist country of farmers and traders, Bhutan's traditional way of life remained unchanged for centuries. Until the 1960s it had no paved roads, no electricity, and no telephones.

Twentieth century intrusions have been deliberately minimal to prevent cultural erosion. One of the world's smallest national airlines, Druk Air has two planes; the capital, Thimphu, has no traffic lights. Traditional dress is required by royal decree, and tourism has been strictly limited.

King Jigme Singye Wangchuck did ease the ban on satellite dishes a few years ago—a soccer fan, he decided that beaming in the World Cup was worth the risk of "cultural contagion."

Now Bhutan has its own version of the 1040, and the first tax returns are due in February 2000. Citizens earning more than $100 a month will be taxed between 5% and 30%. Granted, the new taxes will not cause too many ripples among the Bhutanese—the average annual per capita income is $730.

But what a shame that death and taxes are now mandatory just about everywhere.¹

¹There are still exceptions: Saudi Arabia and Brunei, for example.