Bhutan’s Sustainable Development Fee
” This kingdom is steeped in history, but our gaze is fixed on the future. The future requires us to protect and preserve our heritage but also to forge new pathways leading forthcoming generations to fresh possibilities. This is our moment of evolution; a moment devoted to ensuring that the opportunities our young people seek are found, and realised, here. Our ancestors gave us roots. Now, we help our descendants take wing.“
We, the Bhutanese people, take seriously our responsibilities to each other and to our environment. From our reopening on September 23, 2022, we ask each visitor to Bhutan to make an active and meaningful contribution to our kingdom’s preservation and progress.
The Sustainable Development Fee (SDF) enables investment in transformative programmes that sustain our cultural traditions, protect our environment, upgrade infrastructure, and build our resilience. Critically, it supports the creation of training, mentorships and further education that will create long-term opportunities for our young people. Your contribution is not only a critical investment, it is a gesture of belief in our ambitions and our capacity to achieve them. We like to believe that the SDF will create additional value to guests who come to Bhutan, rather than an additional cost. Another way of looking at the SDF is a ‘pay it forward’ concept, whereby you will ensure that the future visitors to Bhutan will get an as good, or even better experience.
Responsibility, transparency, dependability and trust are at the core of who we are, and of our partnership with our visitors. As we build our nation, we strive to be accountable in our dealings and provide clarity on how the SDF will be used.
What is the SDF used for?
We use the SDF responsibly.
Article 14 of our constitution mandates that all taxes, fees and levies, which include the SDF, are deposited into a Consolidated Account. By law, funds from this general account must cover government recurrent expenditure, to ensure the stability and reliability of government operations. Residual revenue from this account is allocated to specific developmental activities, including building schools, providing free healthcare, skilling youth, maintaining forests and wildlife, providing fresh drinking water sources, renovating historical Dzongs, and other initiatives..
In short, funds from this consolidated general account, including SDF contributions, finance:
– recurrent expenditures, which includes salaries and interest payment on loans, to maintain stable and operational government services for the Bhutanese people;
– development projects selected by the government and outlined in Bhutan’s Twelfth Five Year Plan: 2018-2023 issued by The Royal Government of Bhutan’s Gross National Happiness Commission.
What is the SDF spent on?
Our citizens can depend on the investment commitments we make.
Allocation of annual recurrent expenditure is laid out in Bhutan’s five-year plan, with any residual revenue earmarked for projects identified in the plan. Budget projections are carefully designed, based on sound financial fundamentals. The Gross National Happiness Commission ensures the five-year plans are designed for the benefit of the population.
Tourism is the second highest revenue source for Bhutan. The closure of Bhutan to international visitors during the height of Covid strained the national economy and its reserves. To meet its domestic financial commitments and uphold its responsibility to its people and continue to support ongoing sustainability projects, it was necessary for the government to take loans.
What projects are funded?
We can be trusted in our development plans and approach.
Bhutan is undertaking an ambitious, wide-ranging programme of transformation. The Consolidated Account – the repository for the SDF and other taxes and levies – is directed to support our development on an agile basis. Other nations may structure their development initiatives as discrete projects or specific causes, but this can become piecemeal and fragmented. Our government approaches our nation’s development programme holistically. Alongside specific, ongoing donor and grant-funded development initiatives, our central transformation plans are cohesive and touch every sector and corner of our society.
Bhutan follows a five-year socio-economic development planning cycle. The Five Year Plans (FYP) articulate the socio-economic development priorities and programmes to be implemented over a five-year period.
The planning process for the 12th FYP covering the period 1st July 2018 to 30th June 2023 began in January 2016 with a series of extensive consultations with all relevant stakeholders, including individuals, government agencies, local governments, private sector, Civil Society Organizations, political parties and more.
In order to ensure that socio-economic development is aligned with the overall development philosophy of Gross National Happiness (GNH), all agencies and local governments ensure that cross-cutting themes are mainstreamed in the programmes and projects supported by the SDF funds.