Kathmandu, January 22:

Dr Roop Jyoti, state minister for finance clarified that the financial ordinance has considered Value Added Tax (VAT) as a main source of revenue generation, speaking at an interaction organised by Federation of Nepalese Chambers of Commerce and Industries (FNCCI) in the capital today.

He said that the government by reducing taxes on various commodities has tried to promote import and at the same time has tried to curb the smuggling also. “Though at present, it is difficult to deal with the large number of people wanting to be registered into VAT, the government is, however, appointing ‘tax helpers’,” he said, urging the businessmen to support the government by ‘taking-and-giving’ bills of right value.

Chandi Raj Dhakal, president of FNCCI, on the occasion, said that cutting duties would make VAT more effective, but there should be a balance in tax imposed over the goods that are imported and domestic products to make local industries more competitive. “There prevails ambiguity over various issues that financial ordinance has addressed which needs clarification, he added. He said that VAT imposed over power, transportation and kerosene is not practical.

“The another problem is duty draw back. Administrative delays is a major problem and there should be a time-bound procedure and expert facilitation cell to ease the problem,” he said.

Pradip Man Vaidya, chairman of the income tax and VAT committee, said that the VAT threshold should be maintained at the earlier point to support small entrepreneurs. He also said that the retailers be given some subsidy to encourage them to come into VAT net.

Speakers, on the occasion, urged to maintain the duty at such a per cent that would not hurt domestic industries. They lamented the government for failing to promote domestic industries. They blamed the government for not creating employment opportunities, rather making people more dependent on import.