Excise Bill Targets Alcohol Harm, Public Health Promotion
Bhutan is preparing to implement new excise taxes on alcohol, tobacco, pan masala, and carbonated beverages through the Excise Tax Bill 2025. The National Assembly has recently debated the bill, which proposes higher excise duties on harmful and non-essential products starting in January 2026. The goal is to reduce health risks, promote population health, and increase domestic revenue. If the National Council passes the bill, 170 items will be subject to higher taxes, as reported by Kuensel.
On June 16, the National Assembly of Bhutan deliberated on all 207 sections of the Excise Tax Bill of Bhutan 2025, which comprises ten chapters and two schedules. On Schedule 1 (BTC Codes and Commodities), the House endorsed the government’s proposal to levy excise tax of Nu.1,200 per litre of pure alcohol content on all alcoholic beverages.
Taxing Alcohol by Strength
The bill includes a tax of Nu 1,200 per litre of pure alcohol content, according to The Bhutanese. For example:
- A 750 ml Bhutan Highland Whisky with 42.8% alcohol would see its price rise from Nu 325 to Nu 643.
- A 750 ml K5 whisky bottle would rise from Nu 1,050 to Nu 1,299.
- Beers will also see price increases.
- A 500 ml can of Druk 11,000 with 8% alcohol will increase from Nu 65 to Nu 90.
These taxes reflect the government’s concern over the health costs due to alcohol harm, including liver disease, cancer, and heart disease.
This taxation system is designed to reflect alcohol strength to ensure higher alcohol-strength products have higher prices. It applies equally to domestic and imported beverages.
Higher Tobacco and Pan Masala Taxes
Tobacco products will also face substantial price increases, reports The Bhutanese.
- Cigarettes and biris will be taxed Nu 10 per stick. For instance, a 20-stick packet of Gold Flake will go from Nu 300 to Nu 420.
- Khani (chewing tobacco) will be taxed at Nu 1,500 per kilogram, increasing the cost of a 10-gram packet from Nu 20 to Nu 33.
- Pan masala and supari will be taxed at Nu 2,000 per kilogram, raising the price of a 17g packet of Rajnigandha from Nu 80 to Nu 110.
- E-cigarettes and refill tobacco will be taxed at 100% of their value.
These taxes reflect the government’s concern over the health costs linked to tobacco use, including lung cancer and heart disease.
In 2023, a landmark study by the Copenhagen Consensus Center identified 30 cost-effective interventions to achieve the Sustainable Development Goals (SDGs) in the fastest way possible. Among these interventions, alcohol policy and especially alcohol taxation have been ranked as the second and third most effective intersectoral policies. For every dollar spent on alcohol taxation, a country could get back $53 worth of social benefits.
This is echoed and amplified by World Health Organization Director-General Dr. Tedros Adhanom Ghebreyesus. He is increasingly calling for stronger domestic health financing, highlighting alcohol and tobacco taxation as a key tool. He is warning that many health systems, especially in low- and middle-income countries, are under pressure due to aid cuts and trade disruptions. Dr. Tedros is emphasising that taxing harmful products such as alcohol and tobacco can generate revenue, reduce harm, and support public health systems.
Community Voices Support Expanded Prevention
Community members have called for more ambitious complementary measures alongside taxation. A regular tobacco user interviewed by Bhutan Today noted the difficulty of quitting, even during COVID-19 when access was more limited. She emphasised that in addition to tax policies, the government should increase access to subsidised cessation programs and nicotine replacement therapies to support people who are ready to quit.
Others agree that taxation is an important tool. At the same time, they say as per media reporting, that alcohol taxes should be bolstered with additional prevention and treatment strategies. For example, one resident explained that while her husband uses a significant portion of their household income on alcohol, increased taxes to make alcohol less affordable could be effective if paired with better investments in treatment and rehabilitation services for people like her husband with alcohol use disorder or addiction. She noted hearing of positive outcomes from those who accessed such support services, according to Bhutan Today reporting:
Half of his income goes to [consuming alcohol], and thankfully, I work too, so our daily expenses are covered… The government should invest more in rehabilitation centers. I have heard people who went there actually quit [alcohol].”
Tshering Delkar, a working woman whose husband consumes alcohol heavily
An ex-civil servant pointed to insufficient implementation and enforcement of existing alcohol policy provisions and social normalisation of alcohol and tobacco use as ongoing challenges. He suggested that taxation will be even more effective when paired with comprehensive implementation, enforcement and community awareness initiatives. There are countries such as Thailand or Norway, where coordinated and comprehensive approaches of policy, regulation, and social norms initiatives work together to prevent and reduce alcohol harm, as per Bhutan Today reporting.
We have strong laws, but enforcement is weak. The problem isn’t just the availability of alcohol and tobacco, it’s the fact that young people now smoke openly in public and nobody says anything. It’s become normalised.”
An ex-civil servant
Availability Still Too High
A compelling study reports that Bhutan has one alcohol outlet for every 177 people, reflecting dangerously high availability. Locally brewed products like ara and singchang remain cheap and widely accessible, too.
Moreover, the country faces a high alcohol burden. For example, Bhutan’s official statistics agency reports that the socioeconomic cost of alcohol amounted to 5 billion ngultrum, about $70 million, in 2014, four times higher than the revenue generated by alcohol sales. This massive loss is what the alcohol tax increase seeks to rectify.
Furthermore, per capita adult consumption of pure alcohol is 8.47 litres. This is much higher than the average global per capita alcohol consumption. According to the 2024 World Health Organization Global Alcohol Status Report, worldwide alcohol consumption in 2019 was equal to 5.5 litres of pure alcohol consumed per person aged 15 years or older.
Bhutan’s 2015 National Policy and Strategic Framework to Reduce Harm Due to Alcohol introduced measures such as, limiting availability and regulating marketing. However, their full potential remains untapped without better enforcement.
Raising Alcohol Taxes: Bhutan’s Opportunity for System Improvements
Clearly, Bhutan’s Excise Tax Bill 2025 offers a critical opportunity to promote people’s health and to improve and bolster the alcohol policy environment and the healthcare system. Other countries, including from the South-East Asian region show that raising alcohol taxes helps reduce avoidable costs and harm, unlocks return on investment, and generates much needed, new revenue.
This can be invested in better treatment and rehabilitation services of people with alcohol use disorder and addiction, more comprehensive enforcement of existing alcohol policies to lower alcohol availability and protect more people in Butan from alcohol advertising, as well community awareness and health promotion programs.
As evidence from countries like Thailand shows, taxation works best when it is combined and integrated with other alcohol policy measures.
With the alcohol and tobacco tax increase, Bhutan is on a path to better serve people with alcohol and tobacco use problems, protect children of households with alcohol problems, and build a healthier society for all.
Sources
Asia News Network: “In Bhutan: Higher Prices for Tobacco, Alcohol, Soft Drinks; Cars to Be Cheaper“
National Assembly of Bhutan: “Third Reading of the Excise Tax Bill of Bhutan 2025“
Kuensel Online: “Taxes Alone Cannot Control Alcohol or Tobacco“
The Bhutanese: “Excise Tax Bill to Make Cars Cheaper but Alcohol, Tobacco, and Coke More Expensive“
Bhutan Today: “Excise Tax Bill 2025 Raises Concerns Among Small Businesses and Consumers”