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How a levy prices access to a country

A visa fee is charged once, to cover the paperwork. A per-night levy is charged for the duration, and it is not covering anything. It is a price on being there, and Bhutan writes the reason into the statute.

Reviewed by the Tradergy editorial team · September 2026
In short

Bhutan's Tourism Levy Act 2022 makes every tourist liable for a Sustainable Development Fee of USD 200 per night, with a lower rate for visitors from India set by rules. The Act's preamble names the policy it serves, high value and low volume, and nothing in it earmarks the money.

A visa fee is charged once and covers the processing. A levy charged for every night of a stay is doing something else: it is putting a price on being there. Bhutan sets one by statute, and the Act that creates it names the policy it serves in its own preamble.

Key Takeaways

  • The Tourism Levy Act of Bhutan 2022 makes a tourist liable for a fee of USD 200 per night.
  • The Act's preamble names the policy it upholds, high value and low volume.
  • A separate, lower rate for visitors from India sits in rules made under the Act, not in the Act.
  • A concession granted in 2023 halves the rate until 31 August 2027 without amending the statute.
  • Nothing in the Act earmarks the money, and the IMF treats it as general revenue.

The charge, and what it replaced

The operative provision is one sentence. Section 8 of the Tourism Levy Act of Bhutan 2022 provides that a tourist shall be liable to pay a tourism levy known as the Sustainable Development Fee of USD 200 per night. Section 16 defines a tourist as a foreign visitor staying at least one night whose main purpose is tourism.

What that replaced was a different kind of instrument. Before September 2022, Bhutan operated a Minimum Daily Package Rate: a floor price on the whole trip, covering accommodation, meals, guides and ground transport, inside which the Sustainable Development Fee was a fixed component of USD 65 per night. The tourism authority's own statistical reports set the package rate out by season.

So the change was not simply an increase. A floor on what a visitor had to spend in total was replaced by a levy payable to the state regardless of what else the visitor spent. The IMF's account of the sequence is compact: the fee rose from USD 65 to USD 200 per night in June 2022 for tourists from countries other than India, ahead of the reopening of tourism in September 2022, and a rate for Indian tourists was introduced at the same time. The figure of Nu 1,200 appears in the Rules made under the Act, quoted below, rather than in the Act itself.

The policy is written into the statute

Most tourism policy lives in strategy documents. Bhutan's is in the legislation that raises the money.

The Act's first recital opens by referring to the need to uphold the time-tested tourism policy of high value, low volume. Section 11 makes it a function of the competent authority to strengthen and implement strategies ensuring that the benefits of high value low volume tourism are shared across all regions of the country.

The definitions clause says what the levy is for, in the same breath as defining it: a tourism levy means the levy on all tourists per person per night, applicable throughout the year, as a contribution towards sustainable development initiatives undertaken by the Government and to compensate for the negative environmental impacts associated with tourism.

The tourism authority's own description of the policy is more explicit about the limit. It defines high value, low volume as targeting mindful and responsible visitors while ensuring that the number of tourists the country receives is consistent with the absorptive carrying capacity of its natural endowment, socio-cultural values and infrastructure.

That is a policy of constraining a number, and the levy is the instrument.

Who pays less, and who pays nothing

The Act builds the exceptions in rather than leaving them to discretion, then adds a discretion for everything else.

Section 9 exempts a day tourist who does not travel beyond the first designated point, which section 16 defines as an area identified by the Government within border towns beyond which a visitor pays even for a day visit. It exempts a child aged five and under, sets a concessionary rate of fifty per cent for a child aged six to twelve, and then permits any other exemption or concessionary rate as may be considered necessary.

The separate rate for visitors from India, denominated in Indian rupees, is not in the Act at all. It sits in the Tourism Rules and Regulations 2024, made under the Act, which set a preferential rate of Nu 1,200 per person per night and state that it will remain in effect for two years, after which it may be reviewed and revised in keeping with the principle of the preferential rate.

The border-town exemption has its own published procedure, as do waivers for business events and for familiarisation trips, the most recent of which came into force in April 2026.

The concession that sits on top of the rate

This is the part that is easy to describe wrongly, because the amount a visitor actually pays is not the amount in the statute.

A government announcement of 25 August 2023 granted a fifty per cent discount on the prevailing fee, with a matching discount for children aged six to twelve, and continued the twenty-four hour waiver for border towns. It stated that the incentives took effect from 1 September 2023 and would remain effective for four years, to 31 August 2027, and that the Government would conduct periodic assessments and might discontinue them to uphold the high value low volume policy. Among the reasons given was earning foreign exchange.

The Act was not amended. The rules published afterwards still restate the full statutory amount, and the discount rests on the residual power in section 9 to grant a concession as considered necessary. As at September 2026 the Department of Tourism's own visitor-facing pages state the reduced amount, so the concession is still running.

That structure matters more than the number. A rate set by statute with a time-limited concession on top can be returned to its full level by letting the concession lapse, which requires no legislation.

The money is not ring-fenced

The Act says what the levy is for and does not say where it goes.

There is no provision in the Act earmarking, ring-fencing or appropriating the proceeds to any fund. The statement of purpose sits in the definitions clause, describing the levy's character rather than the destination of the receipts.

The IMF's treatment is consistent with the money being ordinary revenue. Its summary of central government operations carries a memorandum line for tax revenue excluding the fee and hydropower royalties, which is to say the fee sits inside headline domestic revenue and has to be removed to see the rest. A 2024 report describes higher receipts from the fee as helping to finance a public wage increase.

The Department of Tourism does describe what the money supports, listing free healthcare, education and training, infrastructure, and environmental and cultural preservation. That is a statement of policy priorities rather than a legal allocation, and the distinction is worth keeping.

What it did to the numbers

The instrument worked in both directions, and the official assessment says so plainly.

Arrivals were 315,599 in 2019 and 29,812 in 2020, on the tourism authority's own reporting. Borders reopened at the end of September 2022, into the higher rate.

The IMF's 2024 report is direct about the effect: the sharp increase in the fee, which it calls a tax on tourism, likely prevented a speedier recovery of tourism, and it lists the increase among the causes of a deterioration in the external accounts. Its 2025 report repeats that the slowdown reflected in part a steep increase in the tourism tax that hindered the sector's rebound.

After the concession, the same source records arrivals rising 41 per cent year on year in 2024 and receipts growing 35 per cent, despite the reduction, with the share of higher-spending non-Indian visitors continuing to increase. Arrivals from India had reached only about 40 per cent of the pre-pandemic level while arrivals from other countries had fully recovered.

That last split is the policy's own test. A levy set high enough to deter volume deterred it, and the composition of who came changed as well as the count.

Where to look next

The AUD to BTN page carries the live reference rate and a short block on what Bhutan's central bank is left to work with under its anchor. For tourism treated as an export in the national accounts rather than as something to be priced, when visitors are an export industry sets out that framing, and when tourists are inside the exchange rate formula covers a peg defined against a basket that includes tourism receipts. Neither of those is about pricing access, which is what makes the levy a different instrument from either.

Sources

General information about how a statutory tourism levy works. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.

Common questions

What is Bhutan's Sustainable Development Fee?

A statutory levy on tourists, charged per person per night. Section 8 of the Tourism Levy Act of Bhutan 2022 provides that a tourist shall be liable to pay a tourism levy known as the Sustainable Development Fee of USD 200 per night. It is separate from the visa application fee, which is charged once.

Is everyone charged the same amount?

No. The Department of Tourism's Tourism Rules and Regulations 2024 set a preferential rate of Nu. 1,200 per person per night for tourists from India. The Act itself exempts children aged five and under, sets a concessionary rate of 50 per cent for children aged six to twelve, and exempts day visitors who do not travel beyond a designated point in a border town.

Why is the fee lower than the Act says?

Because a concession sits on top of the statutory rate rather than replacing it. A government announcement of 25 August 2023 granted a fifty per cent discount on the prevailing fee, effective from 1 September 2023 and stated to run for four years, to 31 August 2027. The Act was not amended, and the Rules published afterwards still restate the full statutory amount.

What is the money spent on?

The Act does not say. It defines the levy as a contribution towards sustainable development initiatives undertaken by the Government and compensation for the negative environmental impacts associated with tourism, but it contains no provision earmarking the proceeds to any fund or purpose. The IMF's reporting treats the receipts as general government revenue, showing tax revenue excluding the fee as a separate memorandum line.

When is it paid?

At the visa or permit application, before travel. The Tourism Rules and Regulations 2024 require the fee to be paid as prescribed by the Department of Immigration when applying, including for any extension of stay. The Department of Tourism states that the fee is refunded for nights not spent in the country.