Private sector seeks production sector-friendly tax policies
Kathmandu, April 24
The private sector players of the country have urged the government to introduce production sector-friendly tax policies to advance the economy.
Citing that tax policies have curbed the incentives announced by various other laws and policies, the private sector representatives said that friendly tax policies, infrastructure development, stable interest rate on the loans are the
fundamentals for economising the cost of production in the country.
During an interaction programme with private sector for formulation next fiscal’s revenue policy organised by the Revenue Consultation Committee under the Ministry of Finance (MoF), the private sector representatives highlighted some crucial issues that need to be address through the budget of fiscal 2017-18 to propel the country towards higher growth trajectory.
The Revenue Consultation Committee that comprises officials of the MoF, academicians and private sector representatives had sought suggestions from the private sector umbrella bodies — Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), Nepal Chamber of Commerce, Nepal Foreign Trade Association — to take note of their concerns while formulating the revenue policy for the next fiscal.
Speaking in the programme, Hari Bhakta Sharma, president of CNI said that fundamental reforms, including reinforcement of tax laws, capacity enhancement, digitisation of tax system and due recognition to the productive sector were required to boost productivity in the country.
“The government’s over-reliance on remittance and import-oriented revenue structure are not sustainable as such,” according to Sharma. Lauding the government’s recent initiatives for legal reforms, Sharma said that conducive environment for investment and massive investment in infrastructure are key for the sustained economic growth.
Pashupati Murarka, immediate past president of FNCCI urged the government to scrap the provision of 50 per cent of the disputed revenue amount as bank guarantee to file a case in the court. This provision has discouraged the taxpayers to go lodge a case against the revenue amount determined by the tax administration.
Likewise, some of the private sector representatives expressed concerns over low tariff for finished products at the customs points as compared to raw material. Similarly, industrialists have highlighted the high excise for the domestic industries like pet bottles, among others, which are on the verge of collapse as the imported products have flooded the market.
Stating that small and medium enterprises are backbones of the economy, Kiran Dangol, senior vice president of the Federation of Handicraft Association Nepal (FHAN) proposed tax holiday for such enterprises for initial few years of their establishment so that SMEs will flourish and more jobs will be created.
Tourism entrepreneurs also urged the government to waive the value added tax (VAT) in the travel packages they sell in the foreign currency so that they can sell travel packages at competitive rates and attract more tourists in the country. Representatives of the private sector have also appealed the government to ensure that they are not faced with multiple taxation from the local, federal and central government in the federal structure.