No VAT on domestic vegetables: Dr. Mahat

By A Staff Reporter,Kathmandu, June 20: Finance Minister Dr. Prakash Sharan Mahat has clarified that Value Added Tax (VAT) has been imposed on imported potatoes and onions to help domestic production and promote Nepali production.

Addressing the 66th Annual General Meeting of Morang Merchants’ Association, Dr. Mahat said, “We are an agricultural country, we have imposed tax on potato and onion keeping in mind the debate that potato and onion cannot be produced here, the land is left barren, and we only buy and eat by importing from abroad. Many farmers' organisations have welcomed this provision. VAT will be charged only on imports, domestic production will not be affected.”

According to a press statement of secretary of the Minister Dr. Mahat, he said, "In the life of the economy, Biratnagar was at the top, now it has gone down. I believe that Biratnagar will be developed as the economic hub of the East.”

He said that the government was ready to support the development of this region, the promotion of business and industry in this region.

He said that there were problems in our economy as the capital expenditure was decreasing, recurrent expenses could not be reduced and social security obligation and responsibility was high.

"Capital expenditure has been projected at Rs. 200 billion. As our debt and interest liabilities have increased, capital expenditure has decreased. Now is the time to pay the debt taken during the earthquake. As a result, general expenses could not be reduced much, and as debt and interest liabilities increased, there was pressure on capital expenses," Minister Dr. Mahat said. "As a result, we were able to allocate only 17 per cent of the budget for capital expenses."

The actual capital expenditure is 27 per cent, he said, adding, "It will be given to the provincial and local levels under the heading of general expenditure, and under the heading of health and education, it will also be done through capital expenditure," he said.

By adding this, capital expenditure will reach 27 per cent, Minister Dr. Mahat said, and added there was a need to increase capital expenditure.

It is necessary to increase the effectiveness of the allocated capital expenditure to make the economy viable.