The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has urged the government to revise key provisions of the budget for the fiscal year (FY) 2025/26 and other recently implemented policies that impact the private sector.
In a meeting with Prime Minister KP Sharma Oli on Saturday, ahead of the PM’s Spain visit, FNCCI President Chandra Prasad Dhakal expressed concern that several budget measures and policy decisions have created operational challenges for businesses and requested government facilitation to address them.
Prime Minister Oli reportedly responded positively, stating that his administration is committed to fostering a business-friendly environment and would take the FNCCI’s recommendations into serious consideration.
Separately, Dhakal also met with Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel on Sunday to further highlight the FNCCI's concerns regarding the budget. Among the issues raised were the imposition of value-added tax (VAT) on airline tickets and precious stones, problems related to hydropower sector, and the recent implementation of Euro 5 and Euro 6 emission standards on imported vehicles and spare parts.
The FNCCI called for the removal of VAT on the gold and silver trade and the rollback of luxury taxes extended to these and other sectors. Dhakal warned that existing taxes, including VAT on airline tickets and a 2% luxury tax on five-star hotels and resorts, have made Nepal an increasingly expensive tourist destination. He noted that these measures are driving consumers to purchase travel tickets from abroad, resulting in a dual negative effect on the domestic economy.
On vehicle imports, the FNCCI urged flexibility in enforcing Euro 5/6 standards, particularly for goods already ordered under the previous Euro 3 standards. Regarding hydropower, Dhakal emphasized the need for clarity in power purchase agreements, particularly for run-of-river projects, where current "take-and-pay" policies have created investor uncertainty.
The FNCCI further called for the resolution of export disruptions to India caused by quality standard regulations and digital portal issues, especially affecting steel products. It also urged adjustments to customs tariffs that currently impose higher duties on finished goods than on raw materials.
Additional demands included stakeholder consultation before implementing mandatory maximum retail price (MRP) labeling for both domestic and imported goods, and streamlining the pest risk analysis (PRA) process to support the import and export of plant-based goods, particularly in the floriculture sector.
