• Increase tax net while reducing the rate of tax.
• Effective and appropriate mobilisation of revenue.
• VAT should be different according to products and the maximum rate should be 10 per cent.
• For imported raw materials, the maximum custom rate should be 5 per cent.
• On edible products like oil, flour etc the VAT should be minimum.
• The limit in concessions on income tax should be increased.
• Tax return process of export industries should be simplified and arrangements of importing raw materials through bank guarantee should be made.
—Devendra Kumar Agrawal, Former Chairman, Morang Trade Organisation, Biratnagar
More revenue needed
It is better to broaden the tax net than to put additional taxes on existing consumers. International aid agencies have been pressuring the government to increase the domestic sources of income. The forthcoming budget might take some steps towards this direction. This will also be crucial to reduce the budget deficit by increasing internal resources. Due to falling revenues from exports, VAT has become more important. The government however should not raise the rate of VAT only after six months when it raised by three per cent,. but concentrate on effectively implementing it. Due to the absence of a parliament, the amount of foreign aid could diminish. This is why internal revenue generation becomes so important.
—Arbind Khetan, Chartered Accountant, Birgunj
Broaden tax net
The government has to broaden the sources of tax to accumulate more revenue. Prime sources of revenue are custom, income tax, Value Added Tax and excise duty and selling tax. All these need to be beefed up through better implementation. Budget has to ensure that the number of tax payees can be substantially increased. Cheating on tax payment must be discouraged. A transparent tax system can also help raise sources of revenue. For this, the forthcoming budget must deal with tax issues seriously, not only on a policy level but also at the level of implementation. Government enforces must be made more accountable and alive to the changing ground realities of the national economy.
—Binod Mainali, Member, Nepalgunj Traders Association
People who come under the tax system must be broadened to boost revenue collection. Increasing tax burden on existing tax payees is no alternative. Tax collection procedures need to be decentralized, as it is difficult for businessmen to come to Kathmandu for even small things. Simplifying custom rules can boost revenue collection, while preventing smuggling. Illegal movement of goods across the porous border must be stopped. This will force goods to arrive through legal channels, boosting revenue generation. Food items that are the most essential needs of everybody, including the very poor, should be exempt from taxation. Tax on agro-products needs to be reconsidered, as agriculture is the very backbone of our country. This will also help boost the industries that depend on agricultural products. Tax relief can be extended to that section of the private sector that has been suffering due to continuing political disturbances and uncertainties.
—Arun Goenka, Director, Goenka Group, Bhairahawa