KATHMANDU, July 13: The government is preparing to increase fixed capital threshold for industries.
The proposed Industrial Enterprises Act increases capital threshold for small, medium and large scale industries.
The proposed law has increased fixed capital threshold for small industries to Rs 30 million. That means industries having up to Rs 30 million will be classified as small industries. Similarly, capital threshold for medium industries have been raised to Rs 250 million. Likewise, industries having capital of more than Rs 250 million will be classified as large scale industries.
As per existing laws, industries having up to Rs 100 million fixed capital are classified as medium scale industries.
The proposed law has also identified micro enterprises as 'industry'. Giving industry status to micro enterprises, the proposed law has categorized industries having up to Rs 200,000 fixed capital, employing a maximum of nine people, and having annual transaction of less than Rs 2 million, as micro enterprises.
Meanwhile, lawmakers have tabled a proposal to amend 74 provisions in the Industrial Enterprises Bill at the parliamentary committee on Industry, Commerce and Consumer Welfare Protection. In the amendment proposal, lawmakers have sought increment in different tax and waiver facilities for industries. Similarly, they have suggested measures to simplify the process of registering business and exiting the country for foreign investors. They are also for including 'no work, no pay' provision in the bill.
Speaking at an interaction in Kathmandu on Tuesday, Industry Secretary Surya Prasad Silwal claimed that the new Industrial Enterprises Act will be industry-friendly“ "Existing laws and legal provision have failed to speed up industrialization in the country. We believe that the new Industrial Enterprises Act will increase the pace of industrial growth and attract foreign investments in the industrial secto”," he added.
Similarly, Hari Bhakta Sharma, president of Confederation of Nepalese Industries (CNI), said that the draft bill has to be revised. Among others, Sharma urged the government to remove the provision that requires industries to set aside 0.5 percent of their annual turnover for social activities. He also said that the Industrial Enterprises Act should simplify the exit procedure for industries as the country does not have law related to insolvency.