Kathmandu, July 21

The Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC) have submitted their feedback on the draft of the new constitution.

CNI’s feedback includes the guarantee of free market economy, employer’s right, protection of investment and effective tax system, among others. As the draft constitution has expressed commitment to create a foundation for socialism in the Preamble, CNI has sought commitment for a liberal and free market economy to ensure the economic freedom of the people to attain prosperity.

CNI submitted its suggestion during a meeting with Constituent Assembly Chair Subas Chandra Nembang, today. Submitting its feedback on the draft statute, CNI President Narendra Kumar Basnyat said that ‘socialism-oriented’ constitution may create confusion among investors, especially foreign investors who might deem the country has backtracked from the liberal economic policies that were adopted since 1990.

“Nepali people have never been able to exercise their political rights simply because they don’t have the economic strength, which is why along with the promulgation of the new constitution, the country should move forward for economic revolution,” said Basnyat, adding, “The goals of economic revolution can only be achieved through an investment friendly constitution.”

In this regard, as per Basnyat, Nepali people are going to write their fate in the new constitution.

CNI has also suggested adding employer’s right as a fundamental right in the constitution and also sought protection of investment to lure investors to Nepal.

The apex body of industries and services has also sought constitutional guarantee for entrepreneurs to conduct their business in any federal state in the federal system and expressed concerns regarding the tax sharing mechanism of the major taxes.

As per CNI, the central government can effectively levy the major taxes and that revenue sharing mechanism with provinces would be more effective rather than levying major taxes through the state governments. “Effective taxation is necessary for a level playing field and it would be challenging for the provinces and local government to effectively levy the major taxes through their institutional mechanism that is yet to be developed,” according to CNI.

The draft constitution has extended authority to levy excise duty and individual income tax both to the central and provincial governments, and authority to levy taxes on natural resources has been extended to central, provincial and local governments.

Such provisions will create disputes between state and provinces, provinces and local governments and that will harm the business environment, as per CNI.

Similarly, NCC also submitted its feedback to CA Chair Nembang today, stressing on a liberal and free market economy.

CA Chair Nembang assured the private sector organisations that their suggestions would be duly taken into consideration by the concerned committees of the CA.