100pc tax rebate for entrepreneurs in SEZs

Kathmandu, February 20:

Government is planning Special Economic Zones (SEZ) where entrepreneurs would get ‘all incentives’. According to a government official, government is making a provision for giving 100 per cent tax rebate for those who set up their enterprises within SEZ and export 90 per cent of their total products. Similarly, they don’t have to pay Value Added Tax (VAT) including other incentives for five to 25 years period.

Presenting a paper on behalf of the government, Jagdishwore Shrestha, chief of SEZ under the ministry of industries, commerce and supplies, said, “The concept of SEZ is to lure investment at home and from abroad wherein all sort of facilities are availed including tax rebate.”

As per the budget announcement two years ago, the government will construct three SEZs in a bid to boost industrialisation in Nepal in Nuwakot, Birgunj and Panchakhal of Kavre districts, said Shrestha. “To construct SEZs, the government has estimated over Rs 4 billion, which is difficult to manage without financial assistance from China, Japan, India and other countries, he added.

Uday Raj Pandey, general secretary of the Garment Association Nepal (GAN), speaking on the occasion, showed serious concerns on the downward trend in garment export. Pandey said that during the fiscal year 2000, over 90,000 people were directly employment in the garment industry and Nepal exported garment worth over $200 million. However, coming to the year 2005, the export has declined to $50 million and employment to less than 20,000. Only establishing of SEZs will not help us revive sick units and boost industrialisation process, but ‘implementation’ is a key, Pandey opined.

Gautam Man Shrestha, president of Federation of Industries in Nepal Industrial Estates complained that despite the policy preaching for the past 20 years, one window system is yet to be implemented. “Similarly if the implementation is weak, benefits to industrial community remain a distant dream even after establishment of SEZs,” said Shrestha.

Dr Chiranjibi Nepal, senior consultant at the Federation of Nepalese Chambers of Commerce and Industry said “unless we look into quality, delivery system and competitiveness seriously, our industrial units would be unable to enhance export base. What is important is that we have to have market-driven approach through the establishment of SEZs.”

“We need to control smuggling through the porous Indo-Nepal border to get benefit from establishment of SEZs.”

Navin Dahal, executive director of SAWTEE clarified the objective of interaction in identifying the role of SEZs in attracting investment, reviving exports, and creating more empl-oyment. “What has been urge-ntly needed is to identify conto-urs of legal and policy regime.”