Kathmandu, November 14:

Dr Roop Jyoti, assistant minister for finance, today urged support from entrepreneurs a-nd the business community for effective implementation of tax policy and financial Ordinance.

Stating the recent amendment of the Financial Ordinance and value added tax (VA-T) regulations is aimed at facilitating business, he said that the private sector should brace up for effective implementation of the policy. He claimed that the recent amendment came as a campaign of making business and investment environment sound. Dr Jyoti was addressing an interaction on ‘Financial Ordinance 2062 and amendment of fiscal regulations’ organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), today. “The government is committed to making the tax system predictable, result-oriented, transparent and practical,” he said, adding that the main emphasis has been given for effective implementation of VAT. “If VAT is effectively implemented, we can raise as much as Rs 48 billion in revenue from the current level of Rs 24 billion annuall.” He said that VAT was enforced with a view of making taxation transparent, scientific and practical. “For making VAT successful, the billing system should be strengthened. Culture of bill issuance and acceptance must be encouraged.”

The VAT implementation thr-ough retail sector was envisaged so as to ensure the right price of products and to check irregularities at production and at the processing stage. “In order to avoid the difficulties of keeping VAT records through issuance of bills by retailers, a daily cash register system is being considered,” Dr Jyoti said. Addressing the concern raised by businessmen abiout high import duties, he said that the government is ready to bri-ng down the customs tariff level, if the private sector gives assurance on revenue generation equal to the current tax system. Chandi Raj Dhakal, president of FNCCI hailed the latest initiatives at making tax system more business friendly. He, ho-wever, asked to bring in pragmatic economic policies to increase demand in the upcoming Financial Ordinance, sche-duled to be made public on January 14. He also asked to set up a separate excise duty department and permanent revenue board as well as formulate cottage and small industry act.

Pradeep Man Vaidya, chairperson of income tax and VAT committee at FNCCI, made a presentation on changed provisions of tax and VAT. He, however, asked that the provision of mandatory registration for VAT in accordance with telephone bills and house rent should be nullified. “Such a provision is not practical at the moment.” Diwakar Golchha, first vice-president of FNCCI, asked that customs valuations to be made scientific and practical in order to boost fair trade. “Such anomalies were expected to be wiped out after the implementation of VAT. But customs valuation on ad-hoc basis remains a hurdle.”