KATHMANDU, MAY 17
Nepali Congress lawmaker Rajendra Bajgain slammed the current budget making process arguing that budget was becoming an to increase debt rather than identifying sustainable resources to manage for government's expenditure.
Speaking at NC Parliamentary Party meeting today, Bajgain said the government, instead of delivering services to the people, was preoccupied with extracting money from them.
He said the government's failure to appoint a new Governor of Nepal Rastra Banak left the market in a state of instability and mistrust.
He said lack of clarity in monetary policy led to confusion among the investors, entrepreneurs, and the general public. The absence of transparent and accountable management has weakened the financial system, Bajgain argued.
He said tax system was burdensome for both businesses and citizens as corporate tax ranged from 20 per cent to 30 per cent, with an additional 13 per cent VAT, customs duties, and various local taxes. This brings the total tax burden on businesses to about 25 per cent to 35 per cent.
He said 13 per cent VAT was applied indirectly to all consumers, which disproportionately affected the poor. Property and vehicle taxes further add to the burden on citizens.
Such a tax structure neither promotes business growth nor improves the standard of living for the general population, he argued.
The NC lawmaker said while tax compliance existed, the services provided were weak and citizens needed to receive adequate returns on their contributions to the national economy.
Bajgain said Nepal's dependency on imports was a root cause of economic vulnerability. For instance, in the fiscal year 2023/24, around 1.7 million metric tons of rice were imported, costing approximately Rs 22 billion.
Dependency on imports weakens domestic production and depletes foreign currency reserves, he argued.
He expressed his concern over the lack of progress on Budhigandaki Hydropower Project, which remains stalled. He said the government has already spent Rs 44 billion on this project that was expected to ensure energy security, employment, and self-reliance.
Stating that the Prime Minister's remark-"not now"-signals weak leadership as far as Budhigandaki Hydropower Project was concerned. He also said that imposing 13 per cent VAT on air tickets has negatively impacted travel and tourism.
