‘Finance ordinance will discourage smuggling’
Kathmandu, January 15:
State minister for finance Dr Roop Jyoti today claimed that the revisions in finance ordinance 2062-63 would control smuggling and under invoicing, as those who carry out transactions upto to Rs 200,000 have to be registered under Value Added Tax (VAT).
Dr Jyoti opined that it would end unhealthy practices among the business enterprises. With new initiatives in VAT, self enforcement mechanisms would be encouraged and which would increase the number of taxpayers from the retail level, said Dr Jyoti while speaking during the post-finance ordinance interaction programme organised by Media for Economic and Social Awareness (MESA) in the capital today.
“With new provisions in place, customs cheating could be checked that means increasing of revenue to the national coffer as predicted which is around Rs 1.28 billion from customs tariff reduction, said the state minister for finance. “The tariff reduction would help the people as a whole,” he added.
Binod K Chaudhary, president of the Confederation of Nepalese Industries (CNI) expressed serious concerns about the economic situation such as revenue declining, weak investment climate, weak competitive strength and fragile
manufacturing sector in the recent years. “On such back drop, finance ordinance has been released, focusing on making VAT compliance effective,” he said, “Earlier, we were scared that the government may bring ordinance at the cost of the industry.”
He expressed happiness for the minimum 20 per cent duty differential. “What is worrisome is, there is unlimited income tax assessment power for tax collectors and unless that is removed, problems in the tax administration would remain as it is,” Chaudhary said.
Diwakar Golchha, vice-president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), opined that the ordinance has tried to implement VAT in an integrated way which may remove anomalies and improve customs valuation. He said, “VAT has not been implemented effectively at the retail level until now.”
At the function, Dr Jyoti also floated the idea of limited liability to boost investment in the country in a changed context.
However, the VAT imposed on freight and transport is critised by the entrepreneurs.
“If the VAT is imposed on freight and transport, it would discourage export in a greater extent, R M Singh, former president of Nepal Freight Forwarders Association
(NEFFA), showed serious concerns. While talking to The Himalayan Times, he said, “The government should remove such confusions soon to boost export.”