NCC highlights potential challenges, opportunities of implementing budget for FY2024/25

KATHMANDU: Nepal Chamber of Commerce (NCC) has expressed its views on the budget for fiscal year 2024/25. While acknowledging the budget's realism and restraint, the NCC has anticipated potential challenges in its implementation and expressed concerns about economic recovery.

The umbrella organisation of the private sector has also expressed worries about the potential negative impact of sourcing approximately 30% of the total budget from internal debt, due to liquidity issues in the market.

The NCC has praised the budget's focus on key sectors such as agriculture, tourism, energy, IT, and manufacturing. It has welcomed the recognition of the upcoming fiscal year as the start of the Information Technology Decade, with ambitious goals including the construction of a state-of-the-art IT hub.

The NCC has acknowledged past frustrations caused by the retrospective tax system and has welcomed the abolition of retrospective taxes and VAT on certain fruits and vegetables: potatoes, onions and fruits including apples. The private sector to be involved in electricity transmission and distribution and the goal to increase the power capacity in the national grid are optimistic, said the NCC

Moreover, the NCC has welcomed the declaration of the period from 2024 to 2034 as the Agricultural Investment Decade and the announcement of a tourism promotion programme. It has appreciated the initiatives to boost domestic production, import substitution, and exports, and the implementation of business incubation in every province.

The private sector organisation of the private sector has viewed the resolution of tax disputes and the reduction of imports and excise duties on industry raw materials positively. However, it has perceived the non-increase in the income tax exemption limit as a downside of the budget.

The NCC stated that the budget will assist in the development of small businesses and women's entrepreneurship. It also suggested that the customs duty on sensitive goods such as medicines and surgical goods should be withdrawn and that the excise duty on goods produced in Nepal, excluding alcohol, tobacco, and harmful substances, should be removed.

The organisation anticipates that the 5% increase in customs duty on paper will have a negative impact on the printing industry. The organisation emphasised that the issue of making legal provisions for the commercial production of marijuana for medicinal purposes should be effectively implemented.