Please Shed The Accountant’s Mentality

I have said this often enough on this blog - that it is time that the government shed its Accountant’s mentality and learn to think like a Financial Manager. By now they ought to be wiser to the fact that their precious new SDF rule has been, if anything, a total disaster for the country's tourism business. The government cannot fail to notice that the SDF’s contribution continues to be, at best, woeful. In fact, the economic fallout from the new SDF rule has been disastrous.

And yet, the government is adamant at tooting their tattered horn - causing us to waste time in countering the falsehood:

The ZOOMING SDF earning

It should not be difficult for the government and their “experts” to understand that the SDF has only a minor role in creating and supporting a vibrant business opportunity the country frantically needs. Does the government and their supposed experts know that tourism industry affords the most varied business opportunity and provides livelihood to the largest number of Bhutanese - across the broad spectrum of skills? Even at the risk of sounding stupid, let me list out the following impacts that result from the government’s ill-conceived notion that increased SDF will result in greater benefit to the country and its most vital tourism sector:

The journey that is downhill all the way

The well thought out Duration Discounts under the old MDPR rules was done away with. But it would appear that the TCB/DoT found it prudent to reintroduce it - but with a twist. It is so simply twisted that firstly, it is said to be illegal as per the country’s Constitution and, secondly, most tour operators are unsure as to how to do the maths, based on their famous SDF waiver rule. It got so bad that recently the TCB/DoT had to circulate a tabulated sheet - showing how to work the maths. It cannot get any funnier - I mean why should a rule be so confusing that grown up people are required to be instructed like kindergarten kids?

I believe that I have said enough - so I leave you with the following to chew on:

At SDF rate of US$200.00 per person per night halt, a total SDF collection of US$5,000,000.00 will bring in 5,000 tourists, with average night halt of 5 nights.

At SDF rate of US$65.00 per person per night halt, a total SDF collection of US$5,000,000.00 will bring in 15,385 tourists, with the same average night halt.

If you still cannot get the drift, the following are the approximate numbers:

SDF US$200.00 per person = 5,000 tourist arrivals = 5 nights = total economic contribution of Nu.1.039 billion

SDF US$65.00 per person = 15,385 tourist arrivals = 5 nights = total economic contribution of Nu.2.325 billion

The above figures have been arrived at as follows:

At the new higher SDF of US$200.00 the economic value is less than half compared to the old lower rate

At the old lower SDF rate of US$65.00 the economic value is more than double of that of the new higher rate

Can you still "Believe"?