KATHMANDU, June 26: Business community on Tuesday urged the government to increase the ceiling of income tax exemption for individuals in order to raise spending capacity of salaried and fixed middle income groups.
Presently, tax exemption limit stands at Rs 160,000 for individuals and Rs 200,000 for couples.
“Last raise in exemption was announced in 2009. So, it´s already three years. Rise in inflation over these years has sharply eroded spending capacity of fixed middle income groups,” said Jagadish Kumar Rathi, chairman of Tax and Revenue Committee of Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
Rathi, who presented the private sector´s demand for upcoming budget 2012/13, also asked the government to allow entrepreneurs to calculate donations pledged to various political parties, groups and social organizations as their expenses so that they can deduct such expenses while paying income tax.
FNCCI pushed for such a provision mainly as businessmen fear the announcement of fresh elections for Constituent Assembly (CA) and lack of constitution could lead to extortion drive by various groups.
Referring to the stringent laws related with anti-money laundering, the FNCCI officials also asked the government to announce a program that allows business community to disclose their income and property and formalize them. “We had requested for this one-time amnesty last year as well. Though the government said it was positive to it, no program to this effect has been announced yet,” said Rathi.
FNCCI also urged the government to introduce national identification number for every citizen and maintain a digitized database of property owned by every individual to effectively control financial crime.
Pashupati Murarka, vice president of FNCCI, suggested to the government to canalize the next year´s budget for hydropower development, export promotion, tourism development, industry and trade supporting infrastructure and agriculture commercialization. “These are the well-established priority sectors. The government should make sure programs announced in those areas are implemented without fail,” said Murarka.
Rathi too urged the government to smoothen supply of diesel to industries, and instantly sign power development agreements for Arun III and Upper Karnali. “Power scarcity has seriously jeopardized all sectors of economy. Hence, sorting it out should be the top priority,” he added.
Entrepreneurs also demanded that the government implement the much-talked refinance facility. The facility, under the central bank, has promised loans at low interest rates for export-oriented industries. They also pushed the government to expand cash incentives to exports made to India as well, set up modern laboratories and establish standard accreditation so that Nepalis exports do not face standards related non-tariff barriers in the international markets.
“For exports to grow, we must attract new investments. To attain that, we urge the government to declare industries as peace zone, freeing it from undue strikes and non-commercial risks,” said Rathi.
Mediate talks on budget, FM requests pvt sector
As opposition political parties´ refusal to hold talks on budget without forging consensus on political issues deepen confusion over the fate of upcoming budget, Finance Minister Barsha Man Pun on Tuesday appealed to the business community to mediate talks between the government and the opposition parties on budget.
“We are making all possible efforts from our side to come up with a common minimum program (CMP) so that we could have full-fledged budget on time. But as these efforts have not yielded any result yet, I request you (FNCCI) to take initiative in building consensus on CMP,” said Pun.
Speaking at an interaction program on Tuesday, Pun said he has worked out a draft for CMP and also requested UCPN (Maoist) Chairman Pushpa Kamal Dahal to organize meeting with top opposition leaders on budget. “But opposition might not like to discuss on my draft. So, it is better if you (FNCCI) bring all of us on the table and facilitate CMP process by proposing your own draft,” he said.
Referring to the call of FNCCI President Suraj Vaidya, who urged the government to come up with full-fledged budget on time with political consensus, Pun said he was committed to it. “Our political reality is that we need to unveil budget through ordinance. Hence, we have no option but to formulate a budget on consensus basis,” he said.
FM Pun said that the budget for 2012/13 will focus on attracting more investments, offering new incentives to investors, channelising investments in productive sectors and providing support to the domestic industries.