Finance Minister denies tax rate manipulation for appeasement purposes
KATHMANDU: Finance Minister Barsha Man Pun has clarified the government's stance, asserting that the country's economic development cannot be achieved by suppressing the private sector.
During a discussion with representatives from the Nepal Iron Rod Producers Association, who sought to bring attention to tax rate manipulation, Minister Pun stated that the government has implemented a policy to incentivise the private sector through the budget.
A delegation led by Association Chairperson Sahil Agrawal voiced their concerns about perceived injustices in the adjustment of tax rates in the forthcoming fiscal year's budget on sponge iron, a material used in the manufacture of iron rods.
In response, Minister Pun insisted that the tax rates have been amended based on factual evidence, considering the report of a study conducted by the parliamentary committee, the Department of Inland Revenue, past demands from entrepreneurs, and suggestions from the political sector.
"The decision was not made at the discretion of the ministers and secretaries, nor by appeasing anyone," he said, adding, "We are confident that our decisions are accurate and realistic."
He further stated that the government does not endorse the suppression of the private sector or the closure of industries. Minister Pun opined that the decision to revise the tax rate will enhance the competitiveness of the industries.
He also expressed his readiness to listen to the legitimate demands and grievances of the entrepreneurs. However, he emphasised that there is no need to make tax rate changes a subject of controversy. Minister Pun noted that most of the suggestions made by private sector umbrella organisations, including the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chamber of Commerce (NCC) during pre-budget discussions, have been incorporated into the budget.
Minister Pun also communicated that the government has sent a message that tax rates should not be increased, given the recent economic downturn in the country. He claimed that he has listened to the demands of the private sector and continued the policy in several instances. "We have set a very low target this year, compared to 41% last year. We have formulated the policy on the basis of providing 'space' to the private sector. The private sector does not need to operate under pressure," the minister said.
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