Budget balanced, but success hinges on implementation: NCC

By A Staff Reporter,Kathmandu, jun,1 : The Nepal Chamber of Commerce has said that the budget presented by the government for the upcoming fiscal year 2025/26 is balanced and development oriented.

Presenting its views over the budget unveiled by the government for the upcoming fiscal year, the NCC said that the budget is oriented towards trade facilitation, industrial investment promotion and boosting the morale of the private sector.

Although it is an attempt to solve the country's present economic problems, the Chamber raised concerns over implementation of the budget effectively.

"It is challenging to meet the revenue collection target of Rs. 1,315 billion and foreign loans and grants. If economic activities do not expand, revenue collection as per the target will be difficult. Due to the current changing economic situation across the world, it will also be difficult to meet the target of collecting foreign loans of Rs. 233 billion and grants of Rs. 55.45 billion."

It has positively taken note of the fact that projects worth less than Rs. 30 million have not been included in the federal government's budget, it said. 

Similarly, high priority has been given to sectors such as information technology and tourism which is a positive aspect of the budget.

The NCC welcomed the provisions such as removing VAT that has been imposed on digital payments and allocation of Rs. 760 million to provide loans to youth at an interest rate of 3 per cent.

"The provision of no income tax for startup businesses with an annual turnover of Rs. 100 million for five years is positive,” it said. 

The NCC welcomed the provision of a 75 per cent exemption in tax on income from the export of information technology services and the provision of only 5 per cent income tax in the income of people living in Nepal and exporting information technology services abroad.

It also appreciated the provision for land acquisition and financial access for collective housing development and policy-level facilitation for community and joint housing development to be built and operated by the private sector.

The Chamber also mentioned that the provision for providing working capital loans in a simple and accessible manner to productive tourism and construction industries as well as housing development companies is positive. 

Similarly, all types of taxes and duties on machinery and equipment imported for green hydrogen production industry is a positive aspect of the budget, it said.

The NCC has also emphasised that a monetary policy is necessary to facilitate the target of 6 per cent economic growth and limit inflation within the range of 5.5 per cent.

Meanwhile, the Federation of Nepalese Industries and Entrepreneurs welcomed the budget citing that the provisions included in the budget have made the country's overall economy positive and encouraging.

"We expect that the inclusion of agriculture, tourism, energy, industries based on local raw materials, and the development of information technology among the relatively strong aspects of our economy included in the budget will help the entire economy," it said.

In addition, the employment promotion programme that has been introduced to support startups and small and medium entrepreneurs will strengthen the employment-based rural economy in the future, said the Federation.