Govt announces CIPs

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KATHMANDU, April 5:Finance Minister Dr Ram Sharan Mahat honoured top ten taxpaying institutions and individuals with the title of Commercially Important Person (CIP) amid a function at the finance Ministry today.

The government, in accordance with the announcement made in the current fiscal year’s budget last July had selected ten top tax paying institutions and individuals on the basis of total income tax paid during the last year on Wednesday.

The government, instead of conferring the title on ten topmost taxpayers, had selected the top taxpayers from five sectors that include banking and financial sector, manufacturing-based industrial sector, service sector, service and banking sector outside Kathmandu valley and personal taxpayers.

In banking and financial sector, the Rastriya Banijya Bank (RBB) topped the taxpayers list. The other recipients of the CIP awards in the category are the Standard Chartered Bank and the Himalayan Bank.

The source with the Inland Revenue Department said that the income tax paid during the last fiscal year was taken for the calculation of the CIP and the criteria set by the Department also considered accumulated tax paid last year.

Similarly, in manufacturing-based industrial sector, Surya Tobacco Company, Nepal Liquor and Hulas Still Industries were awarded with the CIP title.

Nepal Electricity Authority and Nepal Telecommunications Corporation were the top taxpayers from service sector to receive the CIP status. Likewise, Nepal Industrial and Commercial Bank topped taxpayers from the category of service and banking sector outside Kathmandu valley.

In personal taxpayer category, Jyoti Lal Khanna, Executive Chairman of Yeti Travels received the CIP award, as he was the highest individual taxpayer among the individuals.

All the recipients would be entitled to use the CIP lounge at the Tribhuvan International Airport (TIA). The idea to award the top contributors to the government treasury is an attempt to increase revenue mobilisation by encouraging potential taxpayers to clear taxes.

Honouring the top taxpayers Minister Mahat said, "Taxpayers are the bread earners of the government and the economy, and their honour is just a beginning of their recognition," The government is preparing to bring new and more refined proposals to encourage taxpayers and outstanding performers of the economy, he added.

On behalf of the awardees, Deewakar Golchha from the Hulash Steel, said that conferring CIP title has encouraged private sector entrepreneurs to show better performance in the days to come.

The budgetary announcement to award the taxpayers is an effort to increase the income tax base, in addition to implementing Value Added Tax (VAT) more effectively.

Airlines operators threaten strike CAAN against fare hike

By Satyendra Timilsina

KATHMANDU, April 5:The Nepali airlines companies have threatened to stop domestic flights from Sunday if they are not allowed to fly at higher fares as announced last week. The snag comes as a result of Civil Aviation Authority of Nepal’s (CAAN’s) refusal to increase the airfare.

The airliners last week had announced an increment in domestic fares ranging from 7 to 12 per cent to keep pace increased civil aviation fee structures, and to offset the losses incurred as a result of dwindling tourist inflow. However, the aviation authority refused to endorse their decision.

"The CAAN has refused to abide by our decision. If it does not allow us to operate at increased fares, we will halt all domestic flights from Sunday," said an airlines operator preferring to be unnamed. "Even the increased airfare is less than what the government had allowed to raise two months back," he claimed.

Operators lament that they can in no other way cover the increased operating costs due to the increment in fees for renewal and registration, including the hike in the charges for Airlines Operating Certificates, among others. "Airfare hike is the only way in which the airlines industry can survive under the present circumstances," said Birendra Bahadur Basnet, second Vice President of Airlines Operators Association of Nepal.

However, government officials have their own arguments to make. They accuse the airliners of increasing the airfare violating the government rules, which implicitly states that airfare cannot be changed at least six months after it is once revised. However, the latest announcement of airliners to increase the fare again came hardly two months after it was upscaled ranging from 10 to 20 per cent.

Government officials are serious over the latest threats from airlines operators. "We have decided to take stringent action against those who attempt to challenge the CAAN decision," said Medini Prasad Sharma, CAAN’s Director General. With the recently implemented Civil Aviation Regulations, CAAN can revoke the Airlines Operating License, suspend air flight or fine Rs 10,000 to Rs 50,000 to the airlines companies not following to the directions of the Authority.

The domestic airlines companies last week had announced to increase the fare from Kathmandu to Bhairahawa, Bhadrapur and Biratnagar by Rs 200 and to Nepalgunj by Rs 300. Similarly they had announced to increase the fare to Pokhara by Rs 100 and the mountain flight by US $ 16, setting to US $ 127. However, all announcements can come into effect only after due approval from CAAN.

The government had increased the airfare last January after repeated requests from airline operators stating that the industry would collapse if the fares were not revised. And immediately after the fare hike, the government with an aim to provide further relief to the airlines sector, had included the industry in the list of sick industries.

‘Nepal to join WTO in 2004’

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KATHMANDU, April 5:Despite initial claims that Nepal would obtain the membership of the World Trade Organisation (WTO) by 2001, the government today said that Nepal’s protracted accession to the global rules-based trading system will be completed only in 2004.

Minister for Industry, Commerce and Supplies Purna Bahadur Khadka today at the meeting of Foreign Affairs and Human Rights Parliamentary Committee said that going by the present preparations, the WTO accession process would be completed by 2004.

He informed that the ministry is currently busy negotiating with its trading partners. "The negotiations with Malaysia and Sri Lanka has completed as Malaysia agreed to abide by the trade agreements of the least developed nations and the Sri Lanka to abide by the trade agreements of the SAARC region," he informed.

He also informed that the government is presently busy preparing the proposed tariff binding, opening the service sectors and simplifying the legislative complications. "A proposal to this regard would be forwarded to the Cabinet soon," the minister said.

He also said that Nepal has received the help of the United Nations Conference on Trade and Development (UNCTAD) in setting up a ‘trade point’ to ensure the benefit of the international trading system to small entrepreneurs in Nepal.

The government has also asked for assistance from various countries, including the United States, European Union, Japan, Canada and Australia, to increase its capacity to live up to the multilateral agreements in the WTO. The assistance sought by the government are in the areas of Sanitary and Phyto-Sanitary measures, Technical Barriers to Trade, Trade Related Intellectual Property Rights and Customs Valuation.

The developed countries during the Doha ministerial meet last year pledged to help least developed countries increase their capacities. They had also pledged to shelf the contentious issues and to go for further liberalisation.

The minister today said that Nepal is requesting its negotiating partners for easy access to the WTO. Nepal had carried out the first round of bilateral negotiations in September 2000 in which United States, Canada, European Union, Japan, Australia, Malaysia, India, New Zealand and Sri Lanka had taken part.

The minister also apprised the meeting of various preparations that Nepal is making for its entry to the WTO. Among others, registration of bio-diversity and indigenous technology protection are the major areas where the government is working presently, informed Prachanda Man Shrestha, Chief of the WTO cell at the ministry. He also added that the ministry is preparing to finalise the draft of Vision 2020 that the government had recently floated.

Shrestha said that the government, since the first round of bilateral negotiations, has been holding various consultation meets with the private sector to draw consensus on a wide range of issues including binding tariff, market access, and opening up of service sector, among others.

Indian agro-minister apprised of Nepali plight

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KATHMANDU, April 5:A delegation of Nepali businessmen met Indian Minister for Agriculture and Co-operatives Ajit Singh and discussed the problems faced by Nepali exporters because of the quarantine and food-testing laboratory in India.

The delegation was led by Rabi Bhakta Shrestha, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), states a press release issued here today.

Due to the imposition of quarantine rule by a circular from the Plant Protection Officer of India in February last year, the export of agriculture-based products, medicinal plants and herbs from Nepal to India have stopped, the release says.

Since then Panitanki in West Bengal, neighbouring Kakarvitta, have become the only authorised entry points for any agro- and forest-based products from Nepal. The issue has remained unresolved despite several rounds of talks between the government and the private sector, states the release.

President of Nepal-India Chamber of Commerce and Industry Arun Kumar Chaudhary also apprised the Indian minister of the present problems faced by Nepali exporters.

Minister Singh assured the delegation that the problems of quarantine and food testing would be resolved soon. He also informed that a notification with regard to opening up of two additional entry points has already been worked out.

Strategic mgmt in banking stressed

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KATHMANDU, April 5:Governor of Nepal Rastra Bank (NRB), the central bank, Dr Tilak Rawal has asked the commercial banks to prudently carry out their investments to ensure that in their endeavour to rescue the ailing industries, the banking sector itself does not become sick.

"Since the major economic sectors are not performing well, the banks should give priority to loan recovery. The sectors that are performing well should also not be spared," he stressed.

Dr Rawal said this while inaugurating a three-day workshop on "Strategic Management in Banking" organised jointly by the NRB and Mega Ace Consultancy (India) Ltd. (MACIL) here today.

He expressed that the financial sector of the country maintains a short-term outlook, putting in more focus on immediate returns. Nevertheless, he added that the sector has registered a good growth rate and diversification lately.

"Need to build long-term capacity by developing appropriate strategies is the major challenge the sector faces currently, especially as the banking industry needs to be increasingly efficient and competitive in the more liberalised and competitive environment," Dr Rawal stressed.

Referring to the financial sector reform process, Dr Rawal said that it has contributed to the overall development process through greater financial deepening. "However, the qualitative dimension has lagged behind the quantitative acceleration seen in the sector," he added.

Professor Poonam Kumar, Chairperson and Managing Director of MACIL, stressed on the need for strategic management in banking to face the challenges that has cropped up due to globalisation and information-technology (IT) revolution.

Referring to the increased competition that the banking sector is subjected to form the non-banking financial institutions, she urged the bankers to offer their products in a more innovative and cost-effective manner. For this, she added, human resources base should be developed and utilised along with an integrated and holistic management approach.

"Strategic management is important for the banks to thrive and not just to survive and it comprises activities like strategic analysis, strategy formulation and strategy implementation," she stated.

Supermarkets change shopping habit

By Suvecha Pant

KATHMANDU, April 5:Supermarkets are sprouting like mushrooms in the Kathmandu Valley. In just a few years, even the suburbs in the valley have witnessed the establishment of supermarkets that have changed the shopping habits of many people.

The effect, however, has been negative on the traditional shops. These shopkeepers find themselves lost amid the glamour of the high-rises occupied by the supermarkets.

The one-stop-shop or the shop-under-one-roof has attracted people from all walks of life. Supermarkets are also becoming a means for outing for some families. With a wide range of consumer goods available parents can shop in peace while the children can play with toys.

"Although supermarkets used to be for just the high class, due to competition among them, it has now proved to be a place where goods can be bought at reasonable prices," said Sharad Kumar Singh, a regular customer at Namaste Supermarket.

However, supermarkets have been affected by the economic slowdown more than the small shops. It calls for a huge investment to open such enterprises as the salaries for employees and bulk stocking of goods are but essential for such markets.

"Profit has dipped by 35 per cent in the current fiscal year, but there has been some progress in the past one month," said Deepak Dhakal, Sales Manager of Namaste Supermarket in Jawalakhel.

Whereas the owner of a cold store in Jawalakhel, Ram Poudel says that his sales have been affected by 15 percent. "There has been considerable decline in the sales of my shop and the impact of the economic downturn is greater than that of the supermarket opened here," said Poudel.

Though Dillibazaar recently had a supermarket named after the place, a large number of people have become the regular shoppers of Dillibazaar Supermarket. Parsuram Timilsina, an employee of the supermarket says that a good number of customers come to the supermarket.

People from various walks of life buy goods from here. "Fixed and reasonable price, wide range of goods and regular discount offers make shoppers to come to our supermarket", said Timilsina.

Though customers are attracted by the elegant display of goods, availability of wide range of consumer products, the pricing often makes them hesitant to shop in supermarkets.

But a regular customer says that the price of goods is not always higher in the supermarkets compared to the small local shops. A small price check, makes it clear. Although some items are more expensive others are cheaper. A packet of Nestle Coffee, for instance, costs Rs 70 in the supermarkets while it is sold at Rs 75 in the ordinary shops.

As the trend of shopping at supermarkets is on the rise, ordinary small shopkeepers resent the emergence of the under-one-roof shops for snatching away their clients. Bishweshwore Thapa, an owner of a local cold store at Dillibazaar says that many of his customers have stopped shopping at his store allured by the glamour of the local supermarket. Some shop at supermarkets in an attempt to put themselves on a par with the elite, he adds.

"At the beginning they used to hesitate to enter the supermarket, but with the passage of time most of my regular customers are even shopping there," said Thapa.

However, all the small shopkeepers are not worried about the emergence of supermarkets. Raju Joshi, an owner of a Gift Shop is an example. He is not fazed by the growth of supermarket.

"If buyers go to supermarkets then it is our responsibility to win their confidence. We have to compete with the supermarkets and upgrade our standards instead of complaining,"said Joshi.