Laxmi Capital News
Industrialists reiterate demand for subsidy, incentives

KATHMANDU : Business leaders have reiterated their demands for moresubsidies, incentives and facilities in the budget for the upcoming Fiscal Year2018/19. Such demands feature predominantly in the suggestions made by theprivate sector leaders during a pre-budget interaction program organized by theNepal Rastra Bank (NRB) in Kathmandu on Monday.

Speaking at the program, most of the representatives ofindustry groups and business organizations urged the government to eitherincrease existing subsidies and incentives, or bring new facilities to enhanceefficiency of the industrial and business sector and boost competitiveness oftheir products and services.

The government has been providing incentives and othersubsidies like cash incentives on export of various products, tax relief forsome industries, and interest subsidies on priority sectors.
“Country’s export has been witnessing slackness for the past few years.Realizing the fact, the government should also provide subsidy on loans to theprivate sector like the agri loan to promote export-based industries likepashmina,” said Durga Thapa, president of Nepal Pashmina IndustriesAssociation, said in the interaction. He categorically demanded that thegovernment raise cash incentive on export to 10 percent from existing twopercent.

“Even the two percent cash incentive is hard to receivedue to red tape. The central bank should do the needful for making the processsimpler and easier,” he added.

Saurabh Jyoti, an executive member of the Federation ofNepalese Chambers of Commerce and Industry (FNCCI), lamented the lack ofharmonization of various laws related to facilities provided to businesses andindustries. “While the Industrial Enterprises Act provides us some facility interms of tax deduction, another law related to tax is against such benefit. Theupcoming budget should address this discrepancy,” said Jyoti.

Even bankers are seeking tax relief from the governmentfor banking institutions. They demanded that the corporate tax rate levied onthem should be reduced. “Like tobacco companies, we have to pay 30 percentcorporate tax to the government. Former Nepal Rastra Bank (NRB) Governor, whorecommended the reduction in corporate tax rate for banks, is the incumbentfinance minister,” Gyanendra Dhungana, president of Nepal Bankers Association(NBA), said. “We hope that the new budget will reduce such tax rate for banks.”

He also demand waiver on the tax that the governmentcharges on money that banks spend on their corporate social responsibility(CSR) activities.

The real estate sector has also sought some incentives togive impetus to their business. Ichha Raj Tamang, president of Nepal Land andHousing Development Association, said that the government should provideinterest subsidy for people buying a house for the first time. “The governmentshould come up with a policy whereby first time buyers can buy property bymaking 20 percent down payment, and some interest subsidy for 80 percent bankfinancing,” he explained.

Source : My Republica, 8th May 2018

 

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