Kathmandu, March 17:

Despite the state finance minister Dr Roop Jyoti having repeatedly stated his resolve to implement Value Added Tax (VAT) as a major source of national revenue from all sectors of the economy, businesspersons involved in export sector have concluded that VAT has been emerging as a major hurdle to exports.

Rajesh Kaji Shrestha, assistant minister for industry, commerce and supplies, speaking at the ninth annual general meeting of Export Council of Nepal (ECON), however, promised to resolve export sector’s problems in coordination with business colleagues. Shrestha said that the government has allocated a budget worth about two million rupees to organise international fairs in its annual budget.

He said that the government is committed to work jointly with the private sector and

to identify exportable agro-products in days ahead to boost foreign trade.

Raju Shrestha, president of Export Council of Nepal (ECON), speaking at the same function commented that VAT is a major constraint when it comes to boosting export. He demanded that the goods being purchased by export trading houses for export purposes should be made VAT-exempt.

The new system of packaging goods from the beginning of September 16, 2005, with a number of provisions in it, has adversely affected exporters, said Shrestha of ECON.

He was worried over the denial of membership to ECON by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), an apex body of the business sector, despite repeated requests.

ECON being an important association of exporters has not even been included in the Export Committee of FNCCI, he lamented.

FNCCI, Handicraft Association of Nepal (HAN) and other chambers have been collecting levies from exporters. However, that money is not being spent for the pormotion and improvement of the export, Shrestha of ECON worried. On top of these problems, exporters even have to pay 15 per cent income tax on their export earnings, which has eroded the productive capacity of export business. This should be revoked, he said.

Kush Kumar Joshi, vice-president of FNCCI stressed on the need to fight the growing trade deficit that Nepal faces through the promotion of export trade. He also demanded a concrete export policy with a new vigor to boost exports.

Meanwhile, assistant minister for industry, commerce and supplies also distributed letters of appreciation to three best exporters, namely Aseatic Traders and Exporters, Stupa Trading Concern and On World (Nepal) Trading.