KATHMANDU, May 19: The private sector has urged the government to bring programs in the budget for the fiscal year 2026/27 to lift the deteriorating business morale, create demand in the market, attract stalled investment and create employment opportunities.
Presenting their suggestions to Finance Minister Swarnim Wagle, representatives of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) recommended the government focus on economic transformation through the next year's budget. “The upcoming budget is not just an annual document but is coming at a special juncture in the economic history of Nepal,” the FNCCI states in its recommendation.
According to the FNCCI, it has prepared the common national framework along with six pillars and 60 initiatives, which could aid the government’s policy and programmes in the upcoming budget. Citing the eroding investors’ confidence mainly due to frequent change in taxes, the umbrella organisation of the private sector has sought the government intervention to implement stable tax policy and coherent Finance Act.
Introduce programs in upcoming budget to lift confidence of pri...
FNCCI President Anjan Shrestha said there needs to be a clear guarantee that tax law will not be retrospective. He stressed on the need for implementation of the ‘Single Revenue Code’ with interpretation and the formation of an empowered Board of Revenue.
At present, the industrial production capacity of the country has been limited to 40 per cent, the construction industry at a crossroads in its history and the contribution of the private sector to the GDP has fallen from 28 per cent to 16 per cent in the past few years. In addition, high taxes have increased informal transactions, illegal trade and out migration of enterprises, the FNCCI warned.
The FNCCI has estimated that the crisis in the Middle East will have a negative impact on Nepal’s foreign employment, remittance and foreign exchange reserves in the upcoming year. In this regard, the budget must bring effective programs to revive the economy, it stated.
Meanwhile, Lawmaker Mahabir Pun has demanded the government to allocate at least one percent of the government’s capital expenditure on research and start-up businesses in next year’s budget. Stating that the current tax policy is not industrial-friendly, Pun stressed on the need for subsidizing the import of raw materials rather than promoting luxuries and finished goods.
Speaking at a session of the House of Representatives on Monday, Lawmaker Pun urged the government to waive taxes on emerging enterprises and inventions in their early stages of business.
