A recent study conducted by the UK-aid funded Purnima programme in collaboration with Confederation of Nepalese Industries (CNI) on the business climate highlighted the policy and regulations that were impeding the growth of small businesses in Nepal. At the half-day provincial dialogue, the participants deliberated on creating an enabling environment for local businesses. The dialogue commenced with discussion on the existing tax regulations and provisions for the registration of local businesses. “Tax is a compulsory payment levied by the government on its citizens. Fees on the other hand, are voluntary payments made by the public for the services rendered by the government. While determining the tax rates, the government should keep in mind both the ability of the tax payers as well as its capacity to deliver services respectively,” shared Pawan Lohani, Local Government Finance Expert.
Over 60 participants including grass-root entrepreneurs from Bagmati and Gandaki Province were present. “Unclear jurisdictions at different levels of newly structured government further resulted in delays during registration and tax payment. These constraints not only add to the cost, but also were identified as major reasons behind informal payments including bribery, reference cost and so on,” highlighted one of the participating entrepreneurs.
