As social media platforms like TikTok and Facebook evolve into strong channels for doing business, the Department of Trade (DoT) is grappling with the significant challenge of bringing Bhutan’s rapidly transforming informal online economy into the formal sector.
While digital entrepreneurship is surging, the DoT admits that tracking and monitoring these decentralized, fast-moving transactions remains a complex issue.
“Evaluating the scale of informal online businesses is a tremendous challenge, not just in Bhutan but also in many developing and developed countries,” said an official from DoT.
Currently, there are only 86 active e-commerce business licences registered with the department.
However, officials emphasize that this figure does not accurately represent the true scale of the online marketplace, as the current licensing system cannot distinguish between dedicated e-commerce websites and those operating exclusively through social media profiles.
According to DoT, the figure of 86 active e-commerce licences should not be interpreted as representing the total number of online or social-media sellers operating in the country. There were several such licenses that were also cancelled or not renewed by individuals.
Additionally, the department said that it issued a total of 4,671 licenses in fiscal year 2025-26.
This lack of visibility has sparked concerns among traditional walk-in store retailers, who pay commercial rents, municipal fees, and formal taxes. Many argue that the rise of unverified, often tax-evading online sellers creates an uneven playing field.
The DoT said that they are working to address these disparities.
“The Department of Revenue and Customs (DRC) has recently revised the income tax act and there are provisions which stipulate that individuals who earn income, irrespective of having a business license will need to pay the applicable income tax,” said an official from DoT.
When asked where the line is drawn for casual, peer-to-peer sellers, the DoT clarified that they do not intend to regulate individuals who occasionally dispose of personal belongings. Instead, the focus is on “regular or organised commercial activity undertaken with the intention of generating business income.”
For consumers, the anonymity of many social media sellers poses a significant risk. The Competition and Consumer Affairs Authority (CCAA) remains the primary body for handling complaints, but officials warn that redressal becomes difficult when sellers are unregistered.
“Consumers are advised to exercise caution when dealing with unregistered online businesses, as locating and obtaining redress from such operators can be considerably more difficult,” said the official from DoT.
Moving forward, the DoT plans to continue its sensitization workshops. It has already engaged over 400 individuals in the last two fiscal years to encourage formalization.
The goal, according to the department, is to strike a balance between fostering youth entrepreneurship and ensuring a safe, transparent marketplace for consumers.
Facts Only
* 86 active e-commerce business licenses are registered with the department.
* The current licensing system cannot distinguish between dedicated e-commerce websites and those using social media profiles.
* The figure of 86 licenses does not represent the total number of online or social-media sellers.
* The department issued 4,671 licenses in fiscal year 2025-26.
* The Department of Revenue and Customs has revised the income tax act to stipulate that individuals must pay income tax regardless of business license status.
* Regulation focuses on "regular or organised commercial activity undertaken with the intention of generating business income," not casual peer-to-peer transactions.
* The Competition and Consumer Affairs Authority (CCAA) handles consumer complaints regarding unregistered sellers.
* The Department advises consumers to exercise caution when dealing with unregistered online businesses due to difficulties in seeking redress.
* Over 400 individuals have been engaged in sensitization workshops over the last two fiscal years.
Executive Summary
Full Take
The narrative presents a tension between fostering digital entrepreneurship and ensuring regulatory oversight of an informal economy. The core conflict lies in the difficulty of applying formal legal structures—like licensing and taxation—to rapidly evolving, decentralized digital commerce, especially when transactions occur anonymously on social media. The DoT's effort to define what constitutes "commercial activity" (intention to generate income) versus incidental activity (disposing of personal belongings) highlights a systemic challenge: defining the boundary between individual activity and organized business requires flexibility that current regulatory frameworks struggle to accommodate efficiently across digital spaces. The reliance on reactive measures, such as workshops and consumer warnings, suggests that formalization is currently being pursued through education rather than immediate structural enforcement against the sheer volume and speed of informal market growth. The implication for human agency is whether existing bodies can scale their capacity to monitor these ephemeral online activities effectively without stifling the very entrepreneurial spirit they aim to support.
* BRIDGE QUESTIONS: How can regulatory bodies develop scalable, technology-agnostic frameworks to monitor decentralized commerce across social media platforms? What mechanisms could be established to ensure consumer redress is accessible regardless of a seller's formal registration status? If regulation focuses on *intent*, how can this intent be reliably verified in real-time without imposing an unsustainable administrative burden on small operators?