Bhutan is stepping up its efforts to prevent and reduce non-communicable diseases, which cause 72% of deaths in the country. Starting next year, new taxes on harmful products and industries will increase prices of alcohol and tobacco.
Bhutan complements these fiscal measures with better regulations, lowered blood alcohol concentration levels to prevent alcohol impaired driving, awareness campaigns, and expanded treatment for people with alcohol and other substance use disorders.
Bhutan’s alcohol policy and alcohol taxation initiatives align with global best practices and international standards.

A Health Crisis Demanding Action

Bhutan faces a growing health crisis fueled by non-communicable diseases (NCDs).

According to Kuensel, NCDs such as cardiovascular diseases, cancers, chronic respiratory diseases, and diabetes cause 72% of all deaths in Bhutan.

Globally, NCDs account for 41 million deaths every year, or nearly 80% of all deaths.

72%
NCDs Cause Majority of Deaths in Bhutan
Noncommunicable diseases (NCDs) cause 72% of all deaths in Bhutan.

Alcohol, tobacco, doma, vapes, e-cigarettes, narcotic drugs, and pan masala products are among the main drivers of this crisis.

To prevent further escalation of the harm, the Bhutanese government has decided to revise taxes on alcohol and tobacco. The new taxation framework, set to take effect early next year, aims to reduce population-level alcohol and tobacco use and promote healthier communities.

Movendi International reported in June 2025 about the alcohol and tobacco taxation plans of the Bhutanese government. Now they have been agreed.

Bhutan Is Set To Raise Alcohol and Tobacco Excise Taxes

Revised Tobacco Taxation

Kuensel reports that the government has introduced major changes to tobacco taxation:

  • Cigarettes: Previously subject to a 100% sales tax and 10% customs duty, will now carry a 10% customs duty, 5% GST, and an excise tax of Nu 10 per stick.
  • Cigars: Each stick will be taxed an additional Nu 40.
  • Chewing tobacco: The existing 110% tax will be replaced with 10% customs duty, 5% GST, and an excise tax of Nu 1,500 per kilogram.
  • E-cigarettes, vapes, and refills: The current 110% tax will be replaced by a 100% excise tax, 10% customs duty, and 5% GST.
  • E-cigarette devices: Will face a revised tax of 10% excise duty, 10% customs duty, and 5% GST, replacing the previous 15% rate.

These measures are designed to reduce tobacco use in the population and prevent further NCD-related harm.

Alcohol Taxation Overhaul

Alcohol is another major key driver of chronic disease in Bhutan.

Kuensel highlights that the current 200% tax will be replaced with a system of 100% customs duty, 5% GST, and an excise tax of Nu 1,200 per litre of pure alcohol.

For example, a 750 ml bottle of whisky with 42.8% alcohol content will now be taxed between Nu 325 and Nu 643.

100%
Bhutan Revises Alcohol Tax Structure
The current 200% tax on alcohol will be replaced with a system of 100% customs duty, 5% GST, and an excise tax of Nu 1,200 per litre of pure alcohol.

By reducing alcohol affordability through taxation, Bhutan aims to reduce population-level alcohol use and improve prevention.

Complementary Health Measures

The government has decided to complement the alcohol and tobacco tax with improvements in other regulations, too. Kuensel reports that the revised Tobacco Control Rules and Regulations will explicitly include e-cigarettes, vapes, and heated tobacco products.

In addition, the Ministry of Health has proposed lowering the permissible blood alcohol concentration for drivers from 0.08% to 0.05%.

Awareness campaigns are underway to educate young people about the health risks of alcohol, tobacco, and doma. The government is also working to shift cultural norms that normalise alcohol use and areca nut consumption.

Moreover, support systems are expanding as well. People with alcohol and other substance use disorders are receiving counseling, brief interventions, and rehabilitation services through partnerships with civil society organisations.

A Multisectoral Effort

Furthermore, the National Multisectoral Action for the Prevention and Control of NCDs brings together diverse stakeholders, including the Ministry of Education and Skills Development, Department of Trade, Department of Revenue and Customs, Royal Bhutan Police, Bhutan Food and Drug Authority, The Pema Secretariat, civil society groups, and local governments. This united approach ensures better prevention and accountability.

Global Alignment with Pro-Health Taxation

Bhutan’s actions align with global recommendations and international standards. With the new WHO-led “3 by 35 Initiative”, where Movendi International is a partner, countries receive supported to raise excise taxes on alcohol, tobacco, and sugary drinks to reduce consumption, save lives, and mobilise revenue for health and development. 

Other countries have announced similar plans of raising alcohol taxes this year. Namibia, Viet Nam, and Egypt are just some examples from different countries around the world deciding to raise alcohol taxes to promote population health and improve government revenue.

Movendi International produced a Special Alcohol Issues Feature on Alcohol Taxation – showing that a growing body of evidence details the massive potential of alcohol taxation for global health, for helping achieve the sustainable development goals, and also for significantly contributing to financing health and development.

Movendi Welcomes Ambitious New WHO-Led Initiative to Raise Pro-Health Taxes and Save Millions of Lives
WHO Launches New Initiative to Raise Pro-Health Taxes and Save Millions of Lives
Special Feature: Harnessing the Power of Alcohol Taxation

Building a Healthier Future

Health Minister Tandin Wangchuk urged people to take responsibility for their health by adopting healthier lifestyles, improving diets, engaging in more physical activity, and refraining from alcohol and tobacco use. He emphasised that without personal commitment, government interventions would be less effective.

Last year, the “2024 Financing for Sustainable Development Report: Financing for Development at a Crossroads” showed that weak enabling environments are preventing progress towards the Sustainable Development Goals (SDGs). In this context the report outlined the important role of excise taxes – including alcohol taxes – as revenue source for governments to make crucial investments to achieve sustainable development. This also shows that Bhutan’s comprehensive approach, combining taxation, regulation, awareness, and support, is in line with international standards and evidence-based global practices.

And in late 2023, the World Health Organization released latest data underscoring the globally prevalent inadequacy of taxation on unhealthy products. This encompassed detrimental products and industries, such as alcohol and sugar sweetened beverages (SSBs), revealing a widespread deficiency in employing taxes as a means to reduce harm and promote health.

The WHO also issued a technical manual specifically addressing alcohol tax policy and administration, aiming to provide essential support for countries to raise alcohol taxes.

With evidence-based action, such as Bhutan is undertaking, the country is able to unlock the potential of alcohol policy in general and alcohol taxation in particular to reach health and development for all.