Print Edition - 2014-06-05 | MONEY
FNCCI urges govt to increase income tax exemption limit
Jun 4, 2014-
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to increase the income tax exemption limit for individuals to Rs 300,000 from the existing Rs 200,000 per annum and to Rs 350,000 for married couples from the current Rs 250,000.
The FNCCI said that a revision of the ceiling for taxable income had become necessary as the rupee has been losing value every year. The umbrella organization of the private sector submitted its recommendations to the finance minister amid a function on Tuesday.
Apart from the change in the income tax slab, the FNCCI has urged the government to impose an income tax of only 5 percent for additional income of up to Rs 600,000 above the annual income of Rs 300,000 for an individual.
The apex body of the private sector has also asked the government to introduce 15 new acts and policies to create a conducive investment environment in the country. A majority of these acts and polices are currently in draft format.
Among the acts and polices that the FNCCI wants to be implemented immediately are the Industrial Enterprise Act, Special Economic Zone Act, Bank and Financial Institutions Act, Electricity Act and Certification Act.
Likewise, the Quality Act, Foreign Investment and Technology Transfer Act and related policy, Labour Act, Anti-Dumping Act, Inland Revenue Board Act, Foreign Trade Regulation Act, Realty Business Act and Commercial Farming Act are the other legal provisions of which the FNCCI has been seeking early endorsement by Parliament.
The FNCCI has also asked the government to amend 13 other acts and policies including the Investment Board Act 2011, BOOT Act 2006, Company Act 2006, Foreign Exchange Regulation Act 1962 and Public Procurement Act 2006 in its budget recommendations.
A majority of the acts are also in the Finance Minister’s list for the second generation of economic reforms in the country. Pashupati Murarka, senior vice-president of the FNCCI, said they had urged the government to issue a budget that was investment friendly and which was not just revenue-oriented. “For this, the government should focus on enforcing the necessary acts and policies besides improving infrastructure including energy.”
The FNCCI has urged the government not to change the policies for a definite period of time once they are enacted. In response, Finance Minister Ram Sharan Mahat said that the government itself had planned to invest in a large way in national level projects in order to achieve a high economic growth rate. Mahat also said the government would give priority to the private sector in the upcoming budget.
Meanwhile, the FNCCI has urged the government to increase the rate of capital expenditure and ensure its timely disbursement. Similarly, the FNCCI has asked the government to develop a mechanism to maintain the quality of the capital expenses through the government’s annual financial plan. It has also asked the government to launch special programmes to promote energy, infrastructure, agriculture, tourism, mineral-based industry, manufacturing and exports.
Likewise, for the development of hydroelectricity, the FNCCI has asked the government to provide the same facilities being provided to projects of state-owned Nepal Electricity Authority to private investors.
It has also urged the government to allow participation of the domestic private sector for the completion of hydropower projects like the 900 MW Upper Karnali, 750 MW West Seti, 600 MW Upper Marsyangdi and 880 MW Tamakoshi III where foreign developers have been awarded the contracts.
The FNCCI has also asked the government to give priority to completing electricity transmission lines and the mid-hill highway besides constructing the proposed international airport and initiating construction of an east-west railway. Giving priority to import-substitution industries, operating special economic zones in Bhairahawa, providing soft loans to pashmina wool producing farmers in the high mountain areas and establishing internationally recognized labs are among the agendas that the FNCCI has raised for promoting exports.
Diversification of insurance in agro business, establishment of chemical fertiliser production plants and exemption of VAT for the entire range of agriculture-related production are the other major issues that have been raised by the FNCCI.
Likewise, launching necessary packages for promoting Lumbini, Bouddha, Pashupati and Barah Chhetra are among the agendas related to the tourism sector. In addition, the FNCCI has also asked the government to promote Dhankuta, Surkhet, Ilam and Tansen as main destinations for education and medical tourism.
Simplifying the procedures related to tax-related issues and adopting multiple VAT rates have also been given priority by the private sector.
Published: 05-06-2014 09:15