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Vehicle Import Moratorium (2022–2024)

Last updated: 17 August 2026488 words

Bhutan banned the import of most vehicles from 19 August 2022 to 18 August 2024 to defend falling foreign-currency reserves. New registrations collapsed from over 8,000 a year to under 1,800; imports resumed under heavy taxes that provoked their own backlash, later unwound by the Excise Tax Act 2025.

The vehicle import moratorium was a two-year ban on importing most motor vehicles into Bhutan, in force from 19 August 2022 to 18 August 2024. The Ministry of Finance imposed it to conserve the country's falling convertible-currency and Indian-rupee reserves, which had been drained by the pandemic-era collapse of tourism receipts and a post-lockdown surge in imports — vehicles prominent among them.[1][2]

Reserve adequacy in Bhutan is not merely prudential: the Constitution requires the country to maintain foreign-currency reserves sufficient to cover at least one year of essential imports, and coverage was approaching that floor when the ban was announced.[2]

Scope and exemptions

The moratorium covered most passenger vehicles but carved out three categories: utility vehicles priced under Nu 1.5 million or USD 20,000 (whichever was lower), vehicles for tourism operations, and replacement taxis, whether fossil-fuelled or electric.[1] Initially announced for six months, it was extended repeatedly by Cabinet as reserves recovered slowly.[3]

The effect on the vehicle market was immediate and deep. New vehicle registrations, which had reached 8,342 in 2021, fell to 6,823 in 2022 and collapsed to 1,798 in 2023 — the lowest in modern records — before recovering to 3,616 in 2024 and 5,661 in 2025 as imports resumed.[4]

Lifting and aftermath

The government lifted the moratorium with effect from 18 August 2024, the Finance Ministry stating that "the economic conditions that previously necessitated the imposition of the moratorium have improved."[5] Resumption, however, came with substantially higher vehicle taxes and an additional fuel levy, and the resulting prices provoked broad public complaint — a sentiment echoed in Kuensel commentary calling for a fairer vehicle-tax policy.[6] Pent-up demand collided with the elevated rates through late 2024 and 2025, and green-tax collections from motor vehicles jumped from Nu 99 million to Nu 725 million (~USD 8 million) in a single fiscal year as imports rebounded.[4]

The post-moratorium tax regime lasted barely a year: the Excise Tax Act of Bhutan 2025, effective January 2026, cut taxes on small and medium vehicles by roughly ten points and shifted the taxable base to FOB value, closing the arc that the reserve crisis of 2022 had opened.[7]

See also

References

  1. Govt restricts import of vehicles as reserves decline — The Bhutanese, August 2022
  2. Bhutan bans import of most vehicles as foreign exchange reserves plummet — Reuters via Business Today, 19 August 2022
  3. Cabinet extends vehicle import moratorium for six more months — BBS
  4. National Revenue Report FY 2024-25 (vehicle registrations, Figure 13; green tax) — Department of Revenue and Customs
  5. Government lifts vehicle import moratorium — Kuensel, August 2024
  6. Mobility over machines: a fairer road for Bhutan's vehicle tax policy — Kuensel
  7. Bhutan's vehicle tax cut to make small and medium cars cheaper by 10% — Kuensel via Asia News Network

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