Speaking at an interaction organized by Samriddhi Foundation in Kathmandu on Tuesday, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Acting President Pashupati Murarka said that any increase in the tax rates would further batter business enterprises and cripple the economy.
"We understand that the government needs money at this time to rebuild the damaged structures and accelerate the economic growth. Thus, we don't want to place any new demands. However, the government should not impose new or additional taxes," Murarka said.He also said the government should focus on increasing its spending and bringing everything back to normalcy.
"Focus on increasing spending will also increase economic activity in the country," he said.
Murarka also sought a role for the private sector in the reconstruction phase. "It's not the government which should build the damaged houses. It should hand out cash subsidies to the quake-hit through banking channels. The money should be spent through the private sector," Murarka said.
The Confederation of Nepalese Industries (CNI), has, however, called for the reduction of the VAT rates to boost consumption.
"In this critical period the government should revise the VAT rate which will drive down the price of products. This will eventually accelerate consumption of the products," Hari Bhakta Sharma, vice-president of CNI, said. "We don't mean that the reduction should be for forever. It can be for a temporary period... say two or three years until the economy has revived. Such reduction will also help boost government revenue in the long run."
Kamalesh Kumar Agrawal, general secretary of Nepal Chamber of Commerce (NCC), said the government should refrain from chastising business firms for any delay in paying revenue to the government.
"Firms and companies are yet to return to the complete normalcy. Staff are yet to work in full-fledged condition while paper work and files are not in the proper order. This may hit the process of the auditing and tax-filing, so the government should not be rigid about penalty for any delay in tax payment," Agrawal said.
He also said the government should provide VAT rebates to traders of marble and glass, among other items, who have been badly hit in their inventory during by earthquake, following assessment.
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