Nepal | October 23, 2020

Heavy discount on income tax for small businesses

Share Now:


Announcing the federal budget for fiscal year 2020-21, Finance Minister Yubaraj Khatiwada has offered heavy income tax exemption to small and cottage industrialists.

The government has exempted income tax of up to 75 per cent for businesses with annual transactions of up to Rs two million. Likewise, for businesses whose annual transaction is between Rs two million and Rs five million, the government has exempted 50 per cent on income tax, while 25 per cent exemption has been granted for businesses with annual transaction amounting to Rs five million to Rs 10 million.

Meanwhile, industries established in industrial areas will receive 25 per cent discount on income tax for five years, while all the cooperatives being operated in remote areas do not have to pay any income tax to the government.

Likewise, income tax exemption period for small businesses has been extended by two years to seven years, while the exemption period for women-run enterprises has been extended by three years to 10 years. The government has slashed customs tax on import of machinery and raw materials required for small and cottage industries, agriculture, livestock, veterinary and mask production. Similarly, customs tax on seeds of paddy, maize, wheat and vegetables has also been reduced.

“The government has decided to provide 20 per cent exemption on income tax of the current fiscal year for airline companies, transportation companies, hotels, travel and trekking agencies,” the minister said, “Infrastructure development tax on aviation turbine fuel has also been removed, while the government has also removed all airport service charges for aircraft during the lockdown period and flight restrictions.”

The government has also exempted value added tax on import of raw materials required for producing medicines as well as for raw materials of ayurvedic medicines.

However, the government has increased customs tax on petrol, diesel, gold, alcohol and cigarettes. The government has increased customs tax on imported alcohol by Rs 300 per litre, while Rs 2,000 has been increased on 10 grams of gold import.

Meanwhile, the government has decided to enforce road maintenance charge on electric vehicles worth Rs 12,000.

The government has also increased customs tax on spare parts of automobiles by five per cent.

A version of this article appears in e-paper on May 29, 2020, of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories:

More from The Himalayan Times:

Government’s decision to charge for COVID test, treatment draws flak

KATHMANDU, OCTOBER 21 The government’s decision not to provide free COV- ID-19 test and treatment to everybody has drawn flak from constitutional, legal and health experts. The government has decided to foot the COVID test and treatment cost of only the poor, helpless, single women, differen Read More...

Nepal Telecommunications Authority alerts subscribers to disinformation

KATHMANDU, OCTOBER 21 The Nepal Telecommunications Authority has appealed to all telecommunication subscribers of the country to be aware of the false and misleading information doing the rounds of late. Issuing a notice here today, the country’s telecommunications regulatory body stated tha Read More...

President Bidhya Devi Bhandari inaugurates Ranipokhari

KATHMANDU, OCTOBER 21 President Bidhya Devi Bhandari today inaugurated the historic Ranipokhari and the temple at the middle of the pond. The 2015 earthquakes had reduced the temple to rubble. President Bhandari was accompanied by Prime Minister KP Sharma Oli at the function today. Both th Read More...

National Examinations Board (NEB) Nepal

Grade XII exams from November 24

KATHMANDU, OCTOBER 21 The National Examination Board, which has been authorised by the government to conduct examinations of Grade XII, has finally published the notice about conducting the examinations from November 24 to December 1. The NEB devising the new protocol to hold the examination h Read More...

Teku’s Radha Krishna temple restored

KATHMANDU, OCTOBER 21 UNESCO, in collaboration with the Department of Archaeology, has completed rebuilding of the shikhara-style Radha Krishna temple located at the confluence of the holy Bagmati and Bishnumati rivers at Teku, Kathmandu. To mark the completion, Jeev Nyas Puja, a ritual to Read More...

Traffic lights functional in 24 thoroughfares in valley

KATHMANDU, OCTOBER 21 Metropolitan Traffic Police Division today said traffic lights had been brought back into operation in various thoroughfares of Kathmandu valley. According to MTPD, traffic lights have been brought into operation at Singha Durbar, Padmodaya, New Baneshwor, Putalisadak, Su Read More...

EDITORIAL: The heat’s on

When the country is having to import rice worth billions of rupees annually, declining output due to droughts and other reasons is worrisome With precipitation far above average across the country, this monsoon was an extremely wet one. Or so we thought. But parts of the country were subjected to s Read More...

Government should reconsider decision: Free PCR tests are a must

With the government washing its hands of its responsibility for controlling the coronavirus pandemic through free tests and treatment, people may hesitate to get themselves traced, tested and treated at their own expense. They will, in all probability, hide their infection, if they catch it The gov Read More...