“The new ordinance -- the first amendment to the Finance Ordinance 2009 -- has a new clause added, whereby the government can now hike the duty and tax rates subject to the parliament approval within six months,” said an official at Ministry of Finance.[break]
The ordinance has not made any changes on the rates though, but instead granted authority to the government to revise them upward whenever it deems necessary. “This has granted flexibility in revenue operations. We will adjust the rates on some really needy items soon,” said the source.
So far, the existing law of the country allowed the government to cut tax and duty rates whenever it deemed appropriate. But for raising the rates it was required to seek approval from the parliament. The provision was enacted bracing the spirit of ´no taxation without representation´.
However, the government had opted to go for ordinance for raising the rates after sensing that next parliament meeting is uncertain that the much-needed tax adjustments could be delayed.
The government was under urgent pressure to adjust imports duty for some products like gold, mainly as India´s decision to hike imports tariff for gold rendered it dearer and to prevent possible smuggling caused by widened duty gap.
Nepal Gold and Silver Dealers Association (Negosida) that announced that India´s decision made gold expensive by around NRs 500 in India compared to Nepal, had warned of rise in smuggling and asked the government to increase imports duty to Rs 480 per 10 grams, which is at par with India´s rate.
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