Private sector-friendly manifestos demanded

By A Staff Reporter,Kathmandu, Feb.1: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has made it clear that mutual trust and cooperation between the government, political parties and the private sector are indispensable for the country's economic stability, good governance and long-term prosperity. 

President of FNCCI Chandra Prasad Dhakal has emphasised that the manifestos to be made public by political parties targeting the upcoming elections should focus on protecting, promoting the private sector and boosting the morale of entrepreneurs and businessmen.

"The issues we have raised should be clearly included in the manifesto, as they are not just matters of concern to the private sector but are also related to the overall economic development and prosperity of the country," he said while presenting suggestions on behalf of the FNCCI to political parties to include in their manifestos for the upcoming House of Representatives election to be held on March 5, 2026.

According to the Federation, the private sector contributes about 81 per cent to Nepal's gross domestic product (GDP), and the private sector creates 86 per cent of the total employment. 

Despite such a large contribution, the private sector is being neglected due to an environment of policy instability, insecurity and distrust, he said. Due to this, the overall economic revival is becoming challenging, he added.

He expressed concern about the increasing risk of capital flight, stating that the private sector has reached a historically weak morale. 

He said that the situation is worrying that the private sector is not enthusiastic about taking loans and investing despite the availability of liquidity in banks and financial institutions. 

If this situation continues, he warned that employment, production and revenue may further shrink and the country may head towards failure.

The private sector, which is usually affected by all movements, was hit particularly hard by the September 8 and 9 protests. The private sector has suffered losses worth around Rs. 80 billion. 

Stating that there is no guarantee that arson and vandalism will not occur again even after the reconstruction of the structures, he clarified that economic prosperity is not possible without peace and stability.

The FNCCI urges political parties to prepare manifestos that respect the right to property as provided for in the constitution, ensure unhindered occupations, and maintain policy stability.

"The socialist-oriented economy and the three-pillar policy have not been able to make a significant contribution to entrepreneurship, employment, and revenue. The private sector has always been skeptical. This has especially worried foreign investors," he said.

After the recent protests, the Federation has put forward a proposal for the 'Private Sector Protection and Promotion Strategy to restore the security and trust of the private sector.

Under this plan, it has been suggested to declare industries and commercial establishments as areas of special importance or peace zones, form a special mechanism for industrial security, and provide a one-stop fast service for the reconstruction of damaged structures.

The Federation has also put forward proposals to make the tax system simple, stable, and competitive by introducing a multi-rate VAT, tax cuts in manufacturing industries, ending double taxation, an umbrella act for non-tax revenues, and integrating tax collection within the federal structure.

The Federation has urged the government and political parties to implement a multi-rate lump-sum tax system to make it simple, stable and competitive, gradually reduce the taxes levied on manufacturing industries, eliminate double taxation, and bring a unified umbrella act on non-tax revenue (fees, duties, fines). 

It is necessary to reduce the current high income tax rate to increase market demand and make life easier for the general people. The FNCCI has demanded that companies that reinvest should be granted a 75 per cent income tax exemption.

Similarly, the private sector umbrella has also put forward a proposal to provide up to 75 per cent exemption on income tax to reinvesting companies.

The Federation believes that policy reforms are indispensable to ensure active participation of the private sector in the agriculture, tourism, energy, infrastructure, information technology, and startup sectors. 

The National Startup Enterprise Policy, 2081, for the implementation of startups and information technology requires revision and amendment in the relevant laws. In addition, the FNCCI recommends the establishment of Startup Growth Centre in all provinces in collaboration with the private sector.

It has suggested for the provision of the current tax exemption facility for the promotion of startup enterprises for 10 years and the provision of a 50 per cent tax exemption for another five years.

Similarly, the FNCCI has demanded that an environment be created where private sector investment and contributions in the education and health sectors are treated with respect and considered as collective achievements.

As the construction of the Nijgadh-Kathmandu Fast Track is under way, the construction modality of the proposed Nijgadh International Airport should be determined and given high priority for its maximum utilisation after construction.

For the proper operation of Gautam Buddha and Pokhara International Airports, appropriate modalities should be determined and arrangements should be made for smooth operation with necessary tax exemptions, it said. 

In addition, legal arrangements should be made to involve the private sector in the construction of infrastructure and to ensure that there are no obstacles in the project.