The recent surge in prices of essential goods including potato and onion has left consumers grappling with financial strain and uncertainty. Businessmen, under the pretext of the 13 percent value-added tax (VAT) that the government has announced to impose on potatoes and onions starting mid-July, have disproportionately inflated prices, placing an undue burden on the average citizen. It is imperative that the government takes immediate action to curb black marketeering and ensure effective market monitoring, safeguarding consumers from unscrupulous practices. The imposition of VAT on kitchen staples such as onions and potatoes has been justified as an incentive for local production. However, it is essential to acknowledge that Nepal's self-sufficiency in these crops may take time to achieve. In the meantime, the government must prioritize the interests of ordinary consumers. This can be achieved through rigorous market monitoring and stringent measures to control black market activities. Consumer rights activists have rightly voiced their concerns over the government's decision to impose VAT on various food items, leading to a significant rise in prices. They point out that the government's negligence in effective market monitoring exacerbates the financial burden on consumers. The increased expenses resulting from the imposition of VAT on these items drain the pockets of the average citizen.
To compound the issue, the government's budget for the fiscal year 2023/24 has implemented an unfair tax system, which has allowed the market prices of numerous essential goods to soar. This unjust system needs urgent attention and reform to protect the rights and financial well-being of consumers across the nation. The removal of 170 goods from the list of items eligible for VAT discounts, including potatoes and onions, has further intensified the problem. This decision has prompted traders to nearly double the market prices of these commodities. In addition, the prices of lentils have increased by Rs 20 per kg, and gram has become more expensive by Rs 10 per kg. Nepal heavily relies on imports for potatoes and onions due to limited domestic production. Last fiscal year alone, the country imported potatoes worth Rs 8.18 billion and onions worth Rs 6.17 billion. The scarcity in the supply of these goods has provided an opportunity for illegal trading practices to flourish. As a result, the government's revenue suffers while consumers bear the brunt of exorbitant prices.
Baitadi to emerge tough against black marketeering
It is crucial for the government to acknowledge the adverse consequences of these policies and take immediate action to rectify the situation. First and foremost, effective market monitoring mechanisms must be established to prevent the exploitation of consumers. Regular inspections, strict penalties for violators, and proactive measures to curb black marketeering are necessary to restore consumer confidence and protect their interests. Furthermore, the government should reconsider the imposition of VAT on essential food items. While the aim to incentivize local production is commendable, it should not come at the expense of burdening consumers with exorbitant prices. A balance must be struck to promote domestic growth while ensuring affordable and accessible goods for all. Additionally, a comprehensive review of the tax system is warranted. The government should work in collaboration with consumer rights organizations and other stakeholders to develop a fair and transparent taxation structure that fosters economic growth and protects consumers. The voices of consumer rights activists and organizations must be heard, and their expertise should be actively sought in designing policies that prioritize the well-being of the populace. While the goal of encouraging local production is important, the government must not overlook the immediate interests of consumers. By rectifying the unfair tax system, engaging with consumer rights organizations, and implementing stringent monitoring measures, the government can protect consumers and promote a fair and equitable marketplace for all.
