FNCCI wants income tax exemption slab raised

REPUBLICA

KATHMANDU, June 21: Business community on Tuesday urged the government to increase the income tax exemption limit for individuals to Rs 300,000 and families to Rs 350,000 in a bid to relieve general consumers crushed by double-digit inflation.

“It is time for the government to take step in this regard. The lack of adjustment of exemption ceiling and back-to-back double-digit inflation over the last two years has made life difficult for general public,” said Jagadish Prasad Rathi, chairman of Committee of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).

The raise demanded by the FNCCI stands at Rs 100,000 over the existing exemption slab.

At a pre-budget interaction with top Finance Ministry officials, FNCCI also placed a number of demands to the Finance Minister, mainly seeking income tax holiday, value added tax waiver and downward revision of excise duty.

Referring to the new Anti-Money Laundering (AML) Act, which tags income from undisclosed source as earning from terrorism and anti-social activities, FNCCI also pleaded with the government to unveil a special scheme, allowing all Nepalis to declare their property pledging amnesty of tax and fines for once.

The apex business body argued that amnesty must come if the government is to address the cause of present liquidity crisis at the root and also ensure effective implementation of the AML Act in the future.

“The stringent provisions of the new AML Act have turned both formal and informal sector players wary. The government should open a gateway for formal entry of undisclosed property into the system,” said Rathi.

FNCCI President Suraj Vaidya said the new budget should aim at fostering conducive investment climate and raise confidence of the private sector.

For this, FNCCI has proposed to the government to provide income tax holidays of 5 to 10 years for all industries identified as national priority. “Without such attractive tax incentive, Nepal will fail to attract much-needed fresh investment at this critical juncture of political transition,” said Rathi.

Apart from that, FNCCI has also demanded that the government revise policy and laws related to tax, industries and private sector development in a bid to foster favorable industrial climate. It also stressed the need for harnessing the country´s huge hydropower potential for early end to power crisis.

For exports promotion, FNCCI has urged the government to implement and continue the cash subsidy on third country exports and extend the facility to industries exporting goods to India and receiving payments through banking system. It has proposed that the government develop Nepalgunj, Surkhet and Jumla as herbs collection centers to support value addition and exports of herbal products.

Pushpa Man Shrestha of Nepal Pushmina Industries Association, meanwhile, urged the government to support farmers in high hills to rear sheep and mountain goats so that the country becomes self reliant on wool, pashmina and meat.

“By implementing this program alone, Nepal can effectively displace imports of meat, raw wool and pashmina that run into billions of rupees a year and also help carpet and pashmina industries gain price competitiveness,” said Shrestha.

Budget to focus on investment, social justice: FM

Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari said on Tuesday that the thrust of the new budget will be on promoting investment, raising productions and upholding social justice.

Addressing the business community, Adhikari said the government was initiating pre-budget discussions from Wednesday and planning to announce full-fledged budget on July 13.

“The new budget will be a consensus document of all political parties. It will target to rejuvenate exports, investment, commercialize agriculture sector and manage problems seen in the financial system,” Adhikari said.

He also asked the business community to lobby with the political parties to incorporate a clear provision with the date for budget announcement, irrespective of political instability, in the new constitution.

He also opined that the fiscal years should start from mid-April, instead of mid-July, as practiced in the country since decades.