Nepal | May 29, 2020

‘Investment-friendly local policies necessary’

Himalayan News Service
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Kathmandu, January 28

Finance Minister Yubaraj Khatiwada has asked all the local and provincial governments to draft laws that will help attract investments.

Speaking with officials of Nepal Chamber of Commerce here today, Khatiwada stated local and provincial governments need to draft laws that are in sync with those introduced by central government.

He also sought legal arrangements whereby taxes being levied are at a minimal and do not overtake jurisdiction of the federal government.

“Income tax or value added tax exemption cannot be the jurisdiction of local levels. But, registration of industry can be done at the provincial and local levels and they can assist the private sector by reducing fees on registration services, by providing land if required and building necessary local infrastructure,” Khatiwada said.

“If we are able to mobilise local resources to establish industries at local level, then resources available with federal government can be utilised for other necessary works,” he opined. “The local level should adopt a business-friendly tax system as there is competition in between the local levels to attract investment,” he said. “If we look at our neighbouring countries, we can see that the state governments have been providing tax and other facilities on their own to attract industries and businesses.”

Khatiwada further said there should be a tax system that can attract investors at the local level.

The local and provincial governments also need to cooperate with the federal government and arrange a one-window system such as a special desk or unit to facilitate investment, as per the minister.

“Another important aspect would be to develop a mechanism whereby there is regular interaction between government authorities and business fraternity,” he stated.

“If needed, federal government is willing to coordinate with local and provincial governments to provide necessary resources and knowledge,” he said. “We also need to make sure we do not engage in areas where private sector is already doing a good job and intervene only when it is really crucial.”

A version of this article appears in print on January 29, 2020 of The Himalayan Times.

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