The business community stages a protest in Birgunj on Sunday against a decision by the Birgunj Metropolitan City to hike tax rates. Photo: Ritesh Tripathi/Republica
BIRGUNJ, July 30: Business community of Birgunj took to the streets on Sunday to protest hike in different tax rates by Birgunj Metropolitan City.
Businesspeople of Birgunj -- the only metropolitan city in Province 2 -- took to the streets after Birgunj Municipality increased taxes by as high as 20 times. The municipality has levied tax on buying and selling of scrap materials, among others.
Nearly three dozen associations of traders and businesspeople demonstrated in core areas of Birgunj city, carrying banners asking for revocation of the decision to increase tax rates.
The municipality has also increased tax on import of land and property. Likewise, it has imposed a new tax on import of petroleum products through the city.
A major chunk of petroleum products imported to Nepal from India comes through Birgunj Customs Office.
Local business community have also submitted a memorandum to Mayor of Birgunj Metropolitan City, Bijaya Saraogi, calling for immediate revocation of the decision to hike existing tax rates and impose new taxes. Receiving the memorandum, Saraogi expressed commitment to revisit the tax rates.
Birgunj Chamber of Commerce and Industry (BCCI) had organized a press conference on Saturday to unveil the protest programs.
Interestingly, Mayor Saraogi, who also happens to be a businessman, had actively protested against the government to remove tax on buying and selling of scrap materials in the past, local business leaders say.
BCCI President Om Prakash Sharma alleged that the decision to hike tax rates will slow the pace of economic development as well as affect businesspeople as well as end consumers.
Leaders of different political parties, including main opposition Nepal Congress leader, Ajay Chaurasia, among others, were also present in the protest program, expressing their solidarity with businesspeople.
Speaking in the press conference, BCCI Vice President Gopal Kediya said that the decision of the local units to raise taxes haphazardly will affect business and trading activities in the main trading hub of the country.
Local business community has also been saying that the integrated property tax, which came into implemented from the first day of Fiscal Year 2018/19, is higher compared to taxes being collected by Land Revenue Offices.
The government has authorized local units to collect Integrated Property Tax from the current fiscal year.
Now onward, businesses in the metropolitan city will have to pay a minimum of Rs 200,000 per year as business tax. The minimum tax rate was only Rs 10,000 until the last fiscal year that ended in mid-July.
Officials of BCCI have also criticized the metropolitan city for imposing separate tax rates for hotels, clinics and laboratories, and for levying taxes on industrial products like cement and steel, among others. According to them, the metropolitan city has not event made public the details of the tax rates which its Municipal Executive Council approved recently.
Talking to Republica, Mayor Saraogi claimed that it was necessary to hike tax rates to plug budget gap of the metropolitan city. He, however, vowed to revisit the tax rates.