FNCCI suggests tax reduction, economic transformation

KATHMANDU: Finance Minister Barsha Man Pun stated that the forthcoming budget will be in accordance with the government's annual policies and programmes presented at the federal parliament.

Previously, President Ramchandra Paudel had presented the government's policies and programmes at a joint meeting of both the lower and upper houses of the federal parliament on Tuesday.

During an interaction programme organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on the government's policies and programmes for the fiscal year 2024/25 in Kathmandu on Wednesday, Minister Pun highlighted the government's objective to boost production and employment, and to enhance the domestic economy.

"The forthcoming budget will reflect these policies and programmes. Similarly, the monetary policy will also be consistent with the budget," he stated, adding that the government is open to practical suggestions from the private sector.

The Minister committed to addressing the challenges encountered by the manufacturing and development sectors. He assured that payments to construction contractors will not be held up. "The government serves both as a guardian and a beacon. It is monitoring others and is also under observation," he said, acknowledging that some multi-year projects had faced issues.

Recognising the significance of agriculture, policies, and programmes places equal emphasis on the development of infrastructure to stimulate economic activities. The Minister further suggested that broadening the tax base is more beneficial than raising taxes.

On the occasion, FNCCI President Chandra Prasad Dhakal suggested the government devise a budget that takes into account the resources and capacity of the State, which has the potential to transform the economic landscape.

He conveyed the private sector's aspiration for the budget to contribute to sustainable and substantial economic growth, leading to a transformation.

The FNCCI advised the government against expanding the size of the budget. In the same vein, the FNCCI urged the government to finalise the sovereign credit rating, implement the bilateral investment agreement, ensure a provision for a free multi-year visa (for at least three years) for potential investors, and effectively put into practice the concept of a one-stop service centre.

On behalf of the private sector, the FNCCI President called on the government to identify the viability gap fund and provide its facilities.

The FNCCI urged the government to progressively reduce income tax for production-based industries and to provide 40% discount in income tax for the tourism and IT industries.

The federation has also requested the provision of re-loans for cottage and small industries and women entrepreneurs, the promotion of domestic products and their consumption, and the implementation of startup programmes.

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