Govt mulls slashing corporate tax to attract investment
Kathmandu, November 22
Revenue Secretary at the Ministry of Finance Shishir Kumar Dhungana has said the government is ready to reduce the corporate tax rate to create an environment conducive for private sector-led investment in the country.
Dhungana informed that the country needs more investment from the private sector and hence the government is trying to create an investor-friendly environment.
“Major tax rates have not changed since many years. If investors are ready to invest here and the country receives more investment from private sector, the government is ready to reduce the corporate tax rates,” Dhungana stated.
As per the provision of Income Tax Act, the highest corporate tax rate is 30 per cent at present.
He also added that the government had facilitated industrialists from multiple sectors to draw their investment to the real sector. “The government never looks at the profitability and returns on investment. We are spending the budget on the country’s needs and are aiming to lure investment from the private sector as well,” he said.
Addressing a programme organised by the Confederation of Nepalese Industries (CNI) on ‘Tax Reform for Investment Promotion’, Revenue Secretary Dhungana stated that the government needs more resources to implement the federal system and to fulfil development needs.
“The country cannot advance solely from the borrowings, and we would need huge revenue to run developmental activities and the governmental system,” he said.
Dhungana also requested the entrepreneurs and traders to voluntarily abide by the provisions of tax laws.
He stated that the government had implemented the self-declaration tax system and traders should be faithful in implementing the legal provision.
“If traders are fair and follow the set rules honestly, the government has and will always facilitate them,” Dhungana informed.
On the occasion, Deputy Director General of Inland Revenue Department Shankar Prasad Aryal informed that the government is planning to unveil the preliminary draft of unified tax code within this fiscal year and the government will collect suggestions from concerned authorities.
“Simplification of the tax system is our first priority. The government has planned to prepare the unified tax code and we are in the process of preparing the first draft of the code,” he informed.
Similarly, President of CNI Hari Bhakta Sharma said that the government should increase the capital expenditure to expand the tax bracket. “The government has always been able to meet its revenue collection target, however capital expenditure has remained low. So, government’s expenditure should be increased to expand the tax base,” he stated.
Sharma also stated that the government’s policy should be investor- and taxpayer-friendly to attract investment in the real sector. He also mentioned that the tax laws should be clear and simple.
CNI had organised the discussion programme on the occasion of the Sixth National Tax Day and Tax Week, which is celebrated from November 17 to 23.