Kathmandu, December 4

Textile entrepreneurs have warned the government of a fresh protest after the government showed no interest to address their issues.

Textile manufacturers are against the cancellation of the Value Added Tax (VAT) refund system in textile, which came into effect from this fiscal, stating that the decision has further deteriorated the competitiveness of Nepali textiles in the domestic as well as international markets and had been demanding the government to review the VAT refund system.

After the government did not show any interest to address their issues, entrepreneurs, a few weeks back, protested by shutting their textile factories across the country for a few days. However, they resumed their business after the government assured to

address their issues in some way.

“However, the government still does not seem to be serious about the concerns raised by us,” said Sailendra Pradhan, president of Nepal Textile Industries Association, adding that textile entrepreneurs will be forced to shut their businesses once again if the government is not serious towards their issues.

There are more than 200 textile factories operating across the country.

Similarly, Pradhan also said that though entrepreneurs had asked the government for 13 per cent subsidy on production the government is preparing to give only three per cent of such subsidy, which is not acceptable to entrepreneurs. “The production cost of textiles in Nepal is already high and the cancellation of VAT refund system has made Nepali textiles further uncompetitive,” he added.

Meanwhile, officials at the Ministry of Finance (MoF) have said that issues raised by textile entrepreneurs will be addressed soon. However, MoF does not seem to be in a mood to review the VAT rebate system. Minister for Finance Yubaraj Khatiwada has been saying that textile entrepreneurs will be subsidised in some other ways.