Kathmandu, December 22:

The government is discouraging investment in unproductive sectors like urban land, houses and vehicles. Finance Minister Dr Baburam Bhattarai, addressing entrepreneurs here today, also made it clear that Voluntary Disclosure of Income Source (VDIS) was not property tax. “Rather, it’s an income tax,” he clarified. There has been confusion over VDIS as to whether it is a property or income tax.

Dr Bhattarai was speaking at an interaction on ‘Policies and Processes in Revenue,’ organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) here.

The government has brought the new rule of showing income source while buying automobile, land, and land and house worth over Rs 2 million, Rs 3 million and Rs 5 million, respectively. “This is to discourage investment in unproductive sectors,” he clarified, adding, “Instead of investing in such sectors, invest in productive ones.”

He, however, did not say anything about the present insecure environment for investment. FNCCI president Kush Kumar Joshi, requested the finance minister to provide security to the industrial sector. “Apart from security, labour unrest and load-shedding are bleeding the industries white,” Joshi said.

The Maoist-led government has brought the VDIS scheme to generate more fund for physical infrastructure development and the education and health sectors. Under the scheme, one has to disclose one’s own property on the price based on July 16 and pay 10 per cent tax. “The government will not disclose it, if the taxpayer wants secrecy,” assured Kapil Dev Ghimire, director general of Inland revenue Department (IRD). The entrepreneurs, however, called for a reduction in the tax.

Acting revenue secretary Krishna Hari Baskota said ancestral property does not come under the VDIS scheme.

“The Act will also protect those who pay tax, unlike in 2058 BS when the government had brought a similar scheme but failed,” he added.