KATHMANDU, Aug 31: Minister for Finance Yuba Raj Khatiwada has defended the provision in the new Foreign Investment and Technology Transfer Act (FITTA) to remove loan from the components of Foreign Direct Investment (FDI).

In the earlier FITTA of 1992, loan was categorized as FDI. However, according FITTA of 2019, only equity is considered as FDI.

“The risk of loan is not taken by the bank. The business house needs to take the risk of the money taken,” said Khatiwada, at a discussion program organized by Nepal Chamber of Commerce (NCC) on the theme of ‘existing challenges and opportunities of Nepali economy’.

The finance minister also said that the new act was brought to control the heavy flow of loan as FDI. “The government is flexible about accepting loans from outside the country. However, this is only necessary when there is less liquidity. When there is more liquidity in the country, the government does not allow taking loans from elsewhere,” said Khatiwada.

On the occasion, Khatiwada also said that entrepreneurs would be imprisoned if found guilty of revenue leakage. “If it is proved that someone has evaded the tax, they would be imprisoned for at least one day,” said Khatiwada.

“Paying fines may be not a big deal for business people, however, getting imprisoned will hurt their social status,” said Khatiwada. Stating that even presidents and prime minister go to jail for big crimes in other countries, the finance minister said that tax fraud should be punishable by imprisonment in Nepal.

Khatiwada also said the country will see changes in the use of energy. “We will promote the business of electric home appliances, and other electric products. For this, traders should gradually stop importing diesel run products,” the minister said.

Khatiwada also said that making the PAN card mandatory for all wage earners was a move to make all professions and sectors responsible. “We need PAN card when we gradually shift to formal channels in economy,” he said. 

Minister Khatiwada also stressed on the need of systematic and transparent transaction process in the retail sector.

On the occasion, Rajesh Kazi Shrestha, president of NCC, said that though the government had good intentions behind introducing many legal provisions such as Value Added Tax (VAT), Vehicle and Consignment Tracking System (VCTS), Social Security Fund (SSF) and other legal provision, small business entities have been facing a lot of difficulties in implementation of these initiatives.

“We have listened to the challenges of each sector. We will continue to discuss with these sectors and find solutions to their difficulties,” the minister said.

 
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