Budget: Govt revises tax rates, prioritises domestic industries 

KATHMANDU: The government has adjusted the tax rates of a variety of goods and commodities in the budget for the forthcoming fiscal year, which was announced on Tuesday.

Upon unveiling the budget, Finance Minister Barsha Man Pun declared a decrease in import fees and excise duty on the raw materials of pharmaceuticals, induction cookers, yarn, helmets, incense sticks, sanitary pads, and some other items, with the goal of prioritising domestic industries.

The government has removed the provision of VAT exemption on certain goods, which the Finance Minister stated is aimed at expanding the tax base and establishing a transparent tax system. "I have revoked the VAT imposed on potatoes, onions, apples, and other vegetables and fruits. This will assist in boosting domestic production," stated Minister Pun.

The excise duty rate levied on alcoholic drinks, tobacco, and cigarettes has been raised. Furthermore, the existing threshold for mixed transactions of goods and services for VAT registration has been increased to Rs 3 million.

A green tax has been imposed on the import of petroleum products and coal.

Additionally, the government has implemented a policy to raise import tax and excise duty on certain ready-made goods to safeguard domestic industries.

The income tax imposed on the interest payments of banks and financial institutions has been lowered to attract foreign capital.

Minister Pun has also unveiled plans to create a model agreement to abolish the dual tax system, with the goal of encouraging foreign investment from a variety of source countries.

Information Technology (IT)-based industries will be given an exemption on dividend tax if their profits are capitalised.

The customs duty of 15% currently levied for the import of steel milk cans for animal farms and industries producing more than 1,000 litres of milk daily has been reduced to a mere 1%.