KATHMANDU, May 8: Business leaders have reiterated their demands for more subsidies, incentives and facilities in the budget for the upcoming Fiscal Year 2018/19. Such demands feature predominantly in the suggestions made by the private sector leaders during a pre-budget interaction program organized by the Nepal Rastra Bank (NRB) in Kathmandu on Monday.
Speaking at the program, most of the representatives of industry groups and business organizations urged the government to either increase existing subsidies and incentives, or bring new facilities to enhance efficiency of the industrial and business sector and boost competitiveness of their products and services.
The government has been providing incentives and other subsidies like cash incentives on export of various products, tax relief for some industries, and interest subsidies on priority sectors.
“Country’s export has been witnessing slackness for the past few years. Realizing the fact, the government should also provide subsidy on loans to the private sector like the agri loan to promote export-based industries like pashmina,” said Durga Thapa, president of Nepal Pashmina Industries Association, said in the interaction. He categorically demanded that the government raise cash incentive on export to 10 percent from existing two percent.
“Even the two percent cash incentive is hard to receive due to red tape. The central bank should do the needful for making the process simpler and easier,” he added.
Saurabh Jyoti, an executive member of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), lamented the lack of harmonization of various laws related to facilities provided to businesses and industries. “While the Industrial Enterprises Act provides us some facility in terms of tax deduction, another law related to tax is against such benefit. The upcoming budget should address this discrepancy,” said Jyoti.
Even bankers are seeking tax relief from the government for banking institutions. They demanded that the corporate tax rate levied on them should be reduced. “Like tobacco companies, we have to pay 30 percent corporate tax to the government. Former Nepal Rastra Bank (NRB) Governor, who recommended the reduction in corporate tax rate for banks, is the incumbent finance minister,” Gyanendra Dhungana, president of Nepal Bankers Association (NBA), said. “We hope that the new budget will reduce such tax rate for banks.”
He also demand waiver on the tax that the government charges on money that banks spend on their corporate social responsibility (CSR) activities.
The real estate sector has also sought some incentives to give impetus to their business. Ichha Raj Tamang, president of Nepal Land and Housing Development Association, said that the government should provide interest subsidy for people buying a house for the first time. “The government should come up with a policy whereby first time buyers can buy property by making 20 percent down payment, and some interest subsidy for 80 percent bank financing,” he explained.