 |
|
| Kathmandu, Tuesday January 07, 2003 Paush 23, 2059. |
|
HM promulgates finance
ordinance
No major policy changes made
By Prem Khanal
KATHMANDU, Jan 6 : His Majesty King Gyanendra
today promulgated the Finance Ordinance 2059 by giving continuity to current budget
without any major changes in the previous policies. However, some minor institutional
reforms and measures to boost export industries have been incorporated in the Ordinance.
The ordinance, which was approved by today’s
cabinet meeting, was sent to the Royal Palace for the royal assent, a high-level
government source told The Kathmandu Post.
In addition to the Finance Ordinance, the king
at the recommendation of the Council of Ministers, also promulgated ordinances on
collecting internal loans and appropriation today.
The government was compelled to bring new
financial ordinance for the remaining period of the current fiscal year, since as per the
constitution, the ordinance that was brought by the then Sher Bahadur Deuba government
automatically expires within six months of issuance.
The new ordinance, in an attempt to give some
relief to domestic industries, has floated a policy of allowing them to renew their
registration with the clearance of 50 percent of the total existing excise arrears. Prior
to this, industries were required to clear their arrears before renewing the industries.
The source also said that the ordinance has made
no change in the existing customs rates, but has taken some minor measures to reform the
present revenue administration. Apart from existing ASYCUDA, the computerised customs
network in five major customs points, the ordinance has also vowed to make expansion on
other customs points.
The ordinance, among others, has made provisions
to take steps to check revenue leakage by improving present customs valuation procedures
of the imported goods. The Finance Ministry had earlier proposed to reintroduce reference
price of major imports, but the idea was scrapped after tough opposition. The newly
promulgated ordinance has introduced reform measures on the existing valuation procedures.
"However, the ordinance is silent on part of implementing programmes," said the
source.
Similarly, the ordinance has incorporated some
measures to encourage the ailing export oriented industries. In this regard, the
government is to provide bonded warehouse facilities to cent percent export-oriented
industries at free of cost. Earlier, such facility was available only to cent percent
export-based industries to third country excluding India.
In order to address deepening financial
difficulties due to the soaring regular expenditure and low revenue mobilisation, the
ordinance has raised ceiling of mobilisation of internal loans. In the budget, the total
collection of internal loan including the overdraft was fixed at Rs 12 billion, but it has
excluded the overdraft from the already approved internal loan mobilisation. Apart from
the total internal loan, the change allows the government to mobilise additional Rs 2.5
billion as overdraft from the Nepal Rastra Bank.
Despite strong lobby from the private sector to
slash the present tax rates to provide some relief to terror-wracked private sector, the
finance ordinance has not changed any tax rates. It has made a provision by which business
firms that are not obliged to register with VAT need to clearly display in writing that
their total transactions fall below the threshold of Rs 2 million.
The source also said that the development
expenditure, along with the regular expenditures allocated for the current fiscal year,
has not been changed mainly due to legal complications that may arise while changing such
expenditures in mid-fiscal year. Despite the record-low use of development expenditures,
which is just around Rs 3 billion during the first five months of the current fiscal year
against the released amount of Rs 4.19 billion, the ordinance has not brought major
policy-level change in boosting the expenditures.
Despite government’s reiteration on the
continuation of financial sector, the ordinance doesn’t have any concrete programmes
to expedite financial sector reforms, said the source.
The ordinance has also taken proper measures to
ensure adequate flow of budget to186 projects that have been incorporated under
priority-one projects categorised under Medium Term Expenditure Framework (MTEF) and its
effective and speedy implementation.
Other Stories
|
