KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to end the scrap tax in the

coming budget. A delegation led by FNCCI president Kush Kumar Joshi met Minister for Local Development Purna Kumar Sherma Limbu and asked him to abolish the tax.

FNCCI was moved to action when district authorities call the tender for scrap tax recently. The district development committees of Kaski, Makwanpur, Nawalparasi and Rautahat have called for scrap tax tender and other VDCs are following them. “The tender must be stopped first,” the umbrella organization of entrepreneurs argued. The government and the FNCCI had signed an understanding to end scrap tax by fiscal year 2009-10.

Minister Limbu assured the delegation saying their demand would be addressed in the coming budget. “It will be adjusted,” he said. The scrap tax is used in local development projects at the district level.

Local Self-governance Act has granted the right to district development committee to collect scrap tax but due to lack of a monitoring mechanism, contractors have been collecting it unlawfully. FNCCI has been decrying it as a cause of the price hike.