NFTA suggests adopting multi-rate on VAT

By A Staff Reporter,Kathmandu, Dec. 21: Nepal Foreign Trade Association (NFTA) has submitted its suggestions regarding tax to the High-Level Tax System Reform Suggestion Committee.

President of NFTA Binod Kumar Sethia presented the suggestions prepared by the Association at a programme held at the office of the Inland Revenue Department on Wednesday.

While presenting the suggestions, President Sethia pointed out the need for facilitating the business rather than regulating it.

He said that if the government created a comfortable environment for business, the private sector would increase investment and businesses, the businessmen would get profit, the government would get revenue and common people would get employment opportunities.

"But the government has emphasised regulation rather than facilitation," said Sethia, "The businessmen are suffering because of this, the government has not been able to collect targeted revenue and the country has not been able to progress."

Even if the policy is good, achievement will not be gained, he said adding, “If the intention is not good, no matter how good the policy is, it will not yield the desired results.”

The Association has pointed out the need to implement the concept of multi-rate on value-added tax (VAT), reduce the slabs of income tax, and pay attention to whether it encourages tax evasion or not while determining the rate of tax and duties.

As the high rate of tax is encouraging illegal trade in the country due to open borders, businessmen who are doing business following the law are suffering and the government is losing revenue, said the Association.

President Sethia emphasised that there should be a strategy to control the illegal trade. The Association has presented the suggestions that the concept of multi-rate should be applied in value addition.

He said that Nepal's policies and laws are an obstacle in terms of benefiting Indian tourists and developing Nepal as a destination for shopping, marriage programmes and gatherings.

Even though the government is talking about bringing in foreign investment, our policy rules discourage it, it said. 

The Association claimed that businessmen were suffering from the practice of mistrust among government agencies.

President Sethia that it was unfair for the government to charge a fine for a day's delay to the businessmen or the general public without paying the amount that remains as dues with government for a long time.

"Just as the general public fulfil their duties, the government, government agencies and civil servants should also fulfil their responsibilities," he said.

On the occasion, the chairman of the High Level Tax System Reform Suggestion Committee, Bidyadhar Mallik, said that the committee would make suggestions to the government after studying the policies, rules and laws in detail regarding tax.

Members of the Committee Prof. Dr. Ram Prasad Gyawali and Laxman Aryal and officials of the Internal Revenue Department and Ministry of Finance were present in the programme. Similarly, executive members of the Nepal Foreign Trade Association were also present in the meeting.