KATHMANDU, May 12: The government has announced plans to integrate all economic transactions into digital platforms as part of its policies and programs for the upcoming fiscal year, aiming to promote a cashless and transparent economy.
Presenting the government’s annual policies and programs at a joint meeting of the Federal Parliament on Monday, President Ram Chandra Paudel said the government would move toward formalising a digital economy while minimising revenue leakage.
“All economic transactions will be integrated into digital platforms to establish a cashless, transparent and revenue leakage-free economy,” President Poudel said during the address.
The government has also prioritised technology-friendly revenue administration and plans to implement measures encouraging voluntary tax compliance and quicker settlement of tax disputes.
Under the new policy, the government will review the existing tax structure with the objective of easing the financial burden on entrepreneurs and middle-class households. It also plans to expand double taxation avoidance agreements with different countries.
Two-day Huawei Digital Nepal Conclave 2022
Scattered charges, including pollution and infrastructure-related fees, will be consolidated under a proposed “green tax” system, according to the policy document.
The government has affirmed to adopt a policy to develop Nepal as a tech-hub. The development of digital parks, high-capacity data centers and public digital infrastructures are under the government’ plans.
The government has announced plans to promote ‘software’ and ‘digital’ services by declaring the information technology sector as a national strategic industry. Promotion of cyber security, green computing and AI computing exports are under the government plans.
"The information technology export industry will be provided with financial incentives, investment facilitation, government co-investment, and tax incentives for innovation spending," Paudel said.
Meanwhile, the government has stated that it will give legal recognition to international payment gateways. “By giving legal recognition to international payment gateways, foreign exchange earning and tax management will be made easier.”
The government further announced plans to restructure Nepal’s capital market to align it with international standards. The restructuring will include reforms in the Securities Board of Nepal, the Nepal Stock Exchange and the clearing system.
The policy also aims to increase the participation of institutional investors, pension funds, insurance companies and mutual funds in the capital market. Investment opportunities for non-resident Nepalis will also be expanded.
In addition, the government said it would develop new financing instruments such as debt markets, infrastructure bonds and risk management tools to mobilise long-term capital for infrastructure development.
The government stated that foreign aid and loans would be focused only on high-return projects, while procedures and minimum investment thresholds for foreign investors would be simplified.
The government has also announced plans to achieve the target of 30,000 megawatts of electricity generation in the next 10 years by simplifying the legal provisions that appear as the main obstacles to accomplish the task.
President Paudel said the government will amend the laws related to energy, forests, land and environment to achieve the aforementioned target of energy production. “The laws related to energy, forests, land and environment will be amended and a single-door system will be implemented for this purpose,” said President Paudel.
Paudel also mentioned that residents of the project-affected areas will be given the option of investing in shares instead of providing money as compensation.
