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Kathmandu Thursday January 17, 2002 Magh 04, 2058.
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Govt brings ordinance to meet
security expenses expenses
Post Report
KATHMANDUM, Dec 16 The government has brought an
ordinance to change some of the clauses of the Financial Act 2058 to manage extra
resources due to the pressure created by unplanned extra-security expenditures. The
ordinance comes into effect from Wednesday.
As per the ordinance, the Agriculture
Improvement Fees charged while importing paddy and rice has been increased to 10 per cent.
Similarly, the goods on which customs duty was charged at the rate of 5 per cent has been
added with 1 per cent while the special fee of 1 per cent has been increased to 3 per
cent. The special duty on the imports of car, jeep, van motorcycle double and single cab
pickup has been set at 10 per cent.
The new ordinance, according to a press
statement issued by the Finance Ministry, has also imposed a special fee of Rs 1 per liter
on diesel, patrol and kerosene each. Similarly, changes have also been made on the export
taxes. As per the new arrangement, the export charge of vegetable ghee and oil has been
increased to 10 per cent while the export tax on cathodes, billet, wire, sheets and other
copper goods and zinc oxide has been set at 6 per cent. Similarly, the export tax of 2 per
cent has also been imposed on acrylic yarn.
The ordinance has also increased the
telecommunication service fee from 10 per cent to 15 per cent while the excise duty on
cigarettes, liquor, beer, pan parag have been increased by 5 per cent on average. A new
arrangement has been made to bring soft drinks and mineral water into the net of excise
duty, states the release.
The special fee on the net income for the
purpose of income tax has also been increased to 3 per cent. As per the demand of the
business and other sectors, the deadline for the Voluntary Disclosure of Income Scheme
(VIDS) has also been extended till mid-February.
The government had to allocate extra budget for
security purposes after the declaration of emergency on November 26 that led to the
mobilization of the Royal Nepal Army, thereby incurring extra financial burden.
The government is expecting to accumulate over
Rs 2 billion from the upcoming changes in the tax rates, said a highly placed source of
the Ministry of Finance. Finance Minister Dr. Ram Sharan Mahat told The Kathmandu Post
that he is optimistic that the new measures will help to reduce the mounting financial
burden on the government. He also urged for cooperation from all quarters of the society.
Plunging revenue is one of the main hurdles that
prevented the government from managing extra funds for security. The government in its
budget for the current fiscal year has targeted to accumulate Rs 60.25 billion in revenue.
However, economic slowdown particularly in the foreign trade sector, is likely to bring
down the overall revenue to only around Rs 55 billion. Experts point out that the revenue
growth rate for the current fiscal year could slip to remain at around 10 per cent against
over 18 per cent witnessed last year.
Apart from the upcoming changes in the tax
structure through the ordinance, government will also change the limitation of internal
borrowing set by the bill to raise internal debt. The bill for the current fiscal year has
authorized the government to raise Rs 9 billion at maximum.
However, the source said internal borrowing
limitation would be raised by tabling a separate bill during the upcoming winter session
of the parliament. This comes as a relief to the government whose total non-budgetary
expenditures within the first month of emergency crossed Rs 500 million.
The budget for the current fiscal year had
allocated Rs 10.31 billion for security purposes. However, the source said that the
overall security budget could surge to Rs 15 billion.
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