Economy News The Rising Nepal (Daily)

‘Budget to hit export-oriented industries’

Kathmandu, June 2 (RSS): The Nepal Chamber of Commerce (NCC) has said out of rs 41 billion earmarked for development last year, only Rs 33 billion were spent pointing to the weakness in implementation and the 44.5 per cent increase in development budget this year does not seem credible.

A provision requiring businessmen to issue bills signed by Value Added Tax (VAT) officers clearly spells out the difficulty for industrialists and businessmen and it is unfortunate that the arrangement has not been made as per the international tradition to promote tourism industry and attract tourists.

The matter of setting up an export promotion centre is positive but it lacks a plan of action for implementation. However, commitment to enforce a manual in revenue adminsitration, bring about improvement in expenditure management and banking policy and frame a 20-year long industrial policy deserve appreciation, NCC press release states.

The budget has also seriouly affected the export-oriented industries including ready-made garment industries. NCC said in press release.

Extension of the deadline till Asar of 2057 B.S. for pepole to get registered under VAT seems plausible, but it would have been better had this deadline not been fixed.

Commenting on the budget, the Chamber has also observed that the budget is silent on structural reforms and simplification of VAT and it is unfortunate that VAT has been imposed on essential commodity like wheat.

It has been stated in the reaction, "Part (1), (2) and (3) of Article 9 of Appendix 1 of the Economic Act 2057 have made provision for levying fine of 50 per cent in case of low billing and purchasing the goods by the importers but Article 4 has made provision for reviewing and punishing the importers which is against the principle of social justice and therefore the provision is unjustifiable.

Five per cent tax levied on the import of agricultural goods will make essential commodities of daily use dearer and the consumers will be hit hard while domestic agro-based industries will also be affected, it adds.

The heading on the reaction of the positive aspects of the income tax has stated- the removal of the surcharge on income tax is a laudable step.

The provision made in Sub Articles (1) and (2) of Article 13 of Appendix 6 for the small taxpayers is laudable.

In the negative aspect, the dividend as explained by Nepal Chamber of Commerce in Sub Articles (1), (2), (3), and (4) of Article 39 of Appendix 6 is against the principles of taxation, impractical and it seems that there has been dual taxation.

The provision of auditing the accounts of the taxpayers by the joint team of the Department of Value Added Tax and the Department of Tax is against the spirit of the Finance Minister to honour taxpayers and it will have negative impact on the industrialists and businessmen.

In another report on reaction to the budget, NEFFA says Kathmandu, His Majesty’s Government has removed the existing provision of not applying income tax in the income derived from export in the fiscal year 2057/58 and has introduced a new system of charging income tax for the exports which is bound to negatively affect export trade.

This is stated in a press release issued by president of Nepal Freight Forwarders Association (NEFFA) Rabindra Man Singh here today.

Since this arrangement negatively affects export trade, this will certainly affect the freight forwarders.

As this new arrangement will discourage promotion of exports, NEFFA says that His Majesty’s Government should provide facilities and concessions to the exporters.

NEFFA welcomes the facilities and protection provided to the tourism industry and thinks that the government should give preference for promotion of export.

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