Kathmandu, May 17
The private sector has suggested the government to review income tax slabs and reduce value added tax (VAT) rates and other tax rates through the budget to help businesses recover from the COVID-19 shocks.
The suggestion paper prepared by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), which it plans to submit to Finance Minister Yubaraj Khatiwada, has urged government to exempt income tax for individuals earning up to Rs 600,000 per annum and married couples earning up to Rs 700,000 annually. As of now, individuals earning up to Rs 350,000 per annum and married couples earning up to Rs 400,000 per annum are exempted from income tax. Incomes below this level are levied only one per cent social security tax.
Similarly, FNCCI has also suggested the government to reduce the income tax slab of 10 per cent, 20 per cent and 30 per cent on different annual income thresholds to five per cent, 15 per cent and 25 per cent, respectively. The federation has also urged the government to reduce the corporate income tax rate by 20 percentage points. The private sector body has also suggested the government to provide waiver on all sorts of extra charges, including interest and penalty, on due taxes of businesses as of 2013.
Similarly, FNCCI has said that the government should reduce the VAT rate from 13 per cent to 10 per cent while excise duty on all goods except those products that pose a threat to people’s health should be scrapped.
Along with this, the FNCCI has also sought special tax treatment on imported raw materials. It has also asked the government to scrap demand charge of electricity, defer electricity charge payment period by next four months and facilitate industry’s plan to reduce or raise their capacity.
It has also recommended the government to give all export-oriented industries special treatment in line with those that industries operating inside the Special Economic Zone are getting, ensure that customs tax on imported goods is double the customs tax imposed on imported raw materials and reduce income tax on agricultural income, among others.
Similarly, the private sector has also suggested the government to bring a special relief package worth at least five per cent of the country’s gross domestic product value to revive and upscale the economy.
Submitting a recommendation note on the budget to the Ministry of Finance today, Nepal Chamber of Commerce has said that private businesses are facing capital crunch which is threatening the sustainability of businesses. Similarly, it has also suggested the government to give cash incentives of up to 30 per cent to export-oriented industries, depending on the level of value the industries add before exporting their products.
A version of this article appears in e-paper on May 18, 2020, of The Himalayan Times.
The post Pvt sector urges govt to review taxes, scrap excise duty appeared first on The Himalayan Times.
Written by Sureis
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