'Consumers will be millionaires thru VAT bill lottery scheme"

Kathmandu, May 31: Minister for Finance Dr Swarnim Wagle assured that a new initiative launched by the government will turn Value Added Tax (VAT) receipts into lottery tickets, giving consumers to a chance to become millionaires.

The move is also aimed at encouraging tax compliance, Minister Wagle said at a press meet organized in his office on Sunday. 

In the press meet organized in the wake of unveiling of the budget for the fiscal year 2083/84 BS, the Minister explained that every VAT bill issued in the country would automatically serve as a lottery ticket.

"Every VAT bill will now become an automatic lottery ticket. Through this scheme, we will make some people millionaires every day," he assured.

Minister Wagle shared that Nepali migrant workers sending remittances from back home would also be included in the programme. 

"The government believes the scheme will encourage consumers to demand VAT invoices, helping to reduce tax evasion and improve revenue collection," he added.

On a different note, he said that the government has prioritized a consumption-based tax system to achieve its revenue targets. 

Clarifying the recently released budget does not place an excessive tax burden on the middle-class, he mentioned that one percent of tax will be imposed on the annual incomes of up to Rs 1 million.

Furthermore, the Finance Minister announced a modest levy on electricity consumption so as to fund the expansion of the country's energy infrastructure. 

The government has allocated Rs 85.54 billion for development and expansion of electricity infrastructure in the upcoming fiscal year.

In this context, to secure finance in these investments, consumers using more than 50 units of electricity per month will be subject to a proposed 5 percent tax, he described. 

Likewise, contributions collected through the proposed Equity Fund from private schools education and private hospitals will be mobilized to develop public infrastructure.

Additionally, the contributions will also be used to support nutrition programmes for students in remote areas, stated the Minister. 

Minister Wagle emphasized that a significant portion of the budget must be devoted to meeting regular government obligations.

According to him, the upcoming budget prioritizes completion of the ongoing infrastructure projects.

He expressed his confidence that 12 transmission lines and Postal Highway project be completed within the upcoming fiscal year.

He also shed light on the special budgetary provisions put in place by the incumbent government for developing artificial intelligence (AI) and digital infrastructure. He was of the view that this project is strategically important for Nepal's future development.

The Finance Minister also informed that the incumbent government will give continuity to existing social security programmes. Plans are underway to introduce additional measures aimed at reducing poverty and helping citizens move into the middle-income class, he added. 

Clarifying on capital gains tax, Minister Wagle said that the capital gains tax levied on share transactions would be treated as a final tax. 

The government has put forward a clear provision to end uncertainty surrounding taxation of stock market profits, he said.

The Minister urged public not to go by what he described as 'unnecessary misinformation' regarding capital gains taxation and appealed to the people not to misinterpret it.

"For income earned from share trading, capital gains tax will be the final tax. However, individuals with other businesses or sources of income will continue to pay taxes according to the nature of those activities," he explained.

The Minister also articulated the readiness of the government to correct any implementation errors that may potentially rise.

During the press meet, Minister Wagle made repeated pleas to the public not to doubt the government's ability and caliber regarding implementation of the budget.

He also called for patience, stating that the government should be given time to deliver results before being judged on the success of its budget plan.

It may be noted that the government on May 29 unveiled the government's annual estimates of the expenses and income amounting to Rs 2124.34 billion for the upcoming fiscal year. (RSS)