May 30, 2017 01:14 PM NPT
KATHMANDU, May 29: The government has not made any major change in tax rates for the upcoming Fiscal Year 2017/18.
While there has not been any increment in tax rate, the government has increased excise duty on tobacco and liquor products by 8 to 10 percent. The decision means cigarettes, and wines and other alcoholic beverages will cost more.
Presenting the budget for the coming fiscal year in the parliament on Monday, Minister for Finance Krishna Bahadur Mahara said that though he had done some homework for revising tax rates, he could not touch the rates due to the election code of conduct. Mahara also said that the government will pursue a strategy of increasing tax net rather than increasing tax rate in the days to come.
He also said that the government will intensify the process of signing avoidance of double taxation with countries with whom Nepal has higher volume of transactions and which are likely to make investment and technology transfer in Nepal.
As part of increasing tax awareness and imparting education on taxation, the government will also include subject of Nepal’s taxation system in the curriculum of secondary school, according to the budget announcement.
The government will also make it mandatory for making payments above a certain ceiling for trade with India and Tibet Autonomous Region of China through banking channel, Mahara said, as he out plans to prevent revenue leakages.
The government’s budget size has increased significantly and so has the revenue target. However, it will be difficult for the government to meet the revenue target as tax rates have been kept unchanged.
As the budget size has increased by nearly 21 percent to Rs 1.28 trillion compared to the current fiscal year 2016/17, the government has also raised its revenue target for the upcoming to Rs 730.56 billion.
The government has kept revenue target for the current fiscal year at Rs 565.9 billion.