Government, Private Sector Differ on Tax Hike

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Government, Private Sector Differ on Tax Hike

November 19: Contradictory views between the government and the private sector regarding taxation came to the fore during the Eight National Tax Day on Sunday, November 17. The private sector openly complained about the government’s decision to increase the rate and coverage of tax while Finance Minister Yuba Raj Khatiwada claimed that the government decided to increase tax for making the country’s economy self-reliant.

Speaking at a function organized to mark the National Tax Day, senior vice president of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) Shekhar Golchha and President of Nepal Chamber of Commerce Rajesh Kaji Shrestha raised the issue of tax hike, delay in VAT rebate, and inheritance tax among others.

Meanwhile, Finance Minister Khatiwada defended the government move saying that the decision to hike tax was taken to bail Nepal out from the burden of excessive foreign loans. 

“Nepal is a country in South Asia with the least foreign loan because the country relies on internal revenue to meet the state expenses,” said Khatiwada.

“So far, we have been spared from the burden of excessive foreign loans because former foreign ministers had thought about the consequences and worked accordingly,” he added.

The finance minister clarified that if the government does not impose tax then it will be compelled to take loans.

“We should not only look for short-term benefits and popularity but should be responsible for the future as well,” he said.

He clarified that the government has initiated the process to form Revenue Board to address the problems of taxation.

He said that the government is about to achieve the target of raising three fourths of state expenses through revenue collection.

Meanwhile, FNCCI Senior Vice President Golchha pointed out to the fact that Nepal is the only country in South Asia with the highest tax rate in comparison to the GDP. He also said that it was the duty of the government to properly utilize the tax paid by the public.

“If the government does not utilize the tax properly then the tax payers will be discouraged,” he said.

He said that the small enterprises have been troubled by the mandatory provision of PAN card.




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