Lower house approves Appropriation Bill

Clears legal way for the government to spend budget for FY2019/20

KATHMANDU, June 26: The house of representatives (HoR) has approved the Appropriation Bill 2075 (2019), clearing the legal way for the government to make spending as proposed by Minister for Finance Yuba Raj Khatiwada for Fiscal Year 2019/20.

The bill will now be tabled in the National Assembly for deliberations on Wednesday.After the bill is endorsed from both houses and authenticated by the President, the government will have the authority to execute its expenditure plans as announced in the budget speech for the new fiscal year that begins from July 17.

The budget was approved by the parliament's lower house following extensive topic-wise discussions in full house meetings.

Commenting on the budget, lawmakers of the main opposition, Nepali Congress, said that the budget was increasing financial burden on general public by imposing higher taxes. “The current government's sole focus is on raising tax rates, rather than expanding the tax net. It has not been able to separate non-tax revenue and tax revenue sectors,” Min Biswakarma, a Nepali Congress lawmaker, said. “It has imposed VAT on service sector which is directly going to put pressure on inflation. While finance minister is an expert on economics, the budget reflects the gap between his academic knowledge and practical approach,” he added. Minister for Finance Yuba Raj Khatiwada defended his budget.

“The government has not raised the rate of the value added tax (VAT) despite the adverse condition for revenue collection,” he said, vowing to gradually expand the net for VAT collection. He, however, was quick to add that the essential consumable goods will be gradually removed from the VAT net.The finance minister also added that there has been a shift from reliance on custom duties to internal tax system including the VAT and income tax. Earlier on May 29, the government unveiled a budget of Rs 1.53 trillion for FY2019/20 without introducing any notable new development project and keeping major tax rates unchanged, but increasing allocations for distributive programs.

Among others, the budget has raised social security allowance for elderly citizens, hiked the salary of government staff and increased funds for parliamentarians for development work in their constituencies, with an aim to appease one and all. This has contributed to a surge in budget size by nearly 17 percent compared to the budget for the current fiscal year.The government has allocated Rs 957.1 billion (62 percent) for recurrent expenditures, Rs 408.59 billion (27 percent) for capital expenditures and Rs 167.8 billion (11 percent) for financing purposes for the implementation of its policy and programs.