Bikash Rana, president, Airline Operators Association of Nepal (AOAN)

The aviation industry, around the world plays an important role in the economic growth of the country, and Nepal is no exception. The government should take immediate steps to improve the industry. The tourism industry, one of the biggest contributors to the economy, is dependent upon the aviation industry.

It is also responsible for creating employment, transporting citizens to inaccessible destinations and to help transport important foods, medicines and other necessary items.

Despite identification of difficulties in the past, nothing much has been achieved. Therefore, immediate solutions to problems related to VAT and lease tax should be addressed.

Aviation industry, which is service-oriented, does not collect VAT from its clients. However, the government has imposed VAT on fuel, spare parts, maintenance and overhaul, insurance premium and all fees payable to the Civil Aviation Authority of Nepal (CAAN) and government organisations by the industry.

This VAT on all these much immediately be removed.

The lease tax imposed on aircraft from 2058 is not clear. The increment of 15 per cent lease tax from three per cent is very unjust. In other countries, the aviation industry is granted concessions on such lease taxes so that the sector can compete with other airlines.

However, the policy of our government seems to be exactly opposite, which does not

allow the aviation industry of the country to operate at the same level.

Therefore, it is suggested that the government amends the 15 per cent lease tax and reinstates the three per cent lease tax as done prior to the 2058.