‘Integration of laws, govt agencies must to boost investment’
December 6, 2019 10:28 AM NPT
From left, Shekhar Golchha, senior vice president of the Federation of Nepalese Chambers of Commerce and Industry, Manjeev Singh Puri, Indian ambassador to Nepal, Yuba Raj Khatiwada, Minister for Finance, Saurya SJB Rana, outgoing president of Nepal India Chamber of Commerce and Industry (NICCI), and Abhimanyu Poddar, Vice President of NICCI, attend the 25th Annual General Meeting of (NICCI) in Kathmandu on Thursday. Speaking at the function, they said that Nepal’s focus should be on becoming the first choice for Indian investors who want to venture out of their country for investment. Photo: Republica
KATHMANDU, Dec 6: The government is in the process of implementing a single-code system for the income tax, value added tax, and excise duty, as an effort to simplify the procedures for taxpayers, a finance ministry official said on Thursday.
Speaking at an event organized by the Society of Economic Journalists Nepal, Udaya Raj Sapkota, joint secretary at the Ministry of Finance, said the tax administration had stepped up preparations for enforcing single-code for the three tax systems.
Sapkota said the ministry was about to make amendment to Financial Act for enforcing the new system.
According to him, the government has adopted the policy of reducing the number of government institutions and integrating the related laws to reduce hassles for potential investors.
The government has established one-stop service center and enacted several laws to attract foreign investment. However, duplication of number of provisions in these laws has still been hindering the investors, government officials and researchers speaking at the event said. They also stressed the need to merge concerned government institutions to effectively implement the government policy to facilitate the investors via one stop service center.
Madhav Paudel, chairman of Nepal Law Commission, said there are many laws to regulate the private sectors business. “However, the disintegrated laws have been creating problems to possible investors,” said Paudel, giving an example of the lengthy procedures that the entrepreneurs need to fulfil for tax compliance.
Ahead of the Investment Summit held in March, the government had revised number of laws, including Foreign Investment and Technology Transfer Act, and Public Private Partnership and Investment Act, among others. The laws are expected to simplify the procedures related to the Department of Immigration, Inland Revenue Department, Department of Land Management, Department of Customs and Nepal Rastra Bank to facilitate foreign investors.
“Despite implementation of the laws, investors still do not have access to online system and it is difficult to validate their digital signature,” Paudel said. “Because of this, investors need to visit various government agencies to submit hard copies of their signed documents.”
Participants of the event deliberated on the possibility of integrating Foreign Investment and Technology Transfer Act with other acts related to foreign exchange and banking, insurance and securities.
“Similarly, laws related to forest, environment and land acquisition can also be implemented through a single legal provision,” Phanindra Gautam, joint secretary at the Ministry of Law, Justice and Parliamentary Affairs, said at the event.
Gautam said that integration of laws can also help remove inconsistency and ambiguity in several government rules. “In many cases, government officials are found to be demarcating area in their jurisdiction and delaying service delivery even after merger of two or more government offices,” he said.
Economist and former finance secretary Rameshwor Khanal blamed the government authorities for duplication of laws. He said Nepal achieved significant improvement in the Doing Business Index this year just because of the reforms in number of laws. “However, procedural hassles are still there,” he added.
Private sector leaders criticized the government for failing to address new types of business, including start ups, in the new laws.
“The government needs to come out of the conventional mindset of implementing policies only for trading of goods and services. Rather, it also has to consider mobility based business such as venture capital in its regulatory framework,” Niranjan Shrestha, director of Laxmi Group, said at the event.