Bankers ask govt to lower corporate income tax

KATHMANDU, JUN 14 -

Nepal Bankers ’ Association (NBA) on Thursday demanded the government lower the corporate income tax on banks and financial institutions (BFI) from the existing 30 percent to 20 percent through the next fiscal year’s budget.

During a meeting with Finance Minister Shankar Prasad Koirala on Thursday, an NBA delegation led by its President Rajan Singh Bhandari argued that the BFIs should be exempted from an unnecessary tax burden claiming that the sector was transparent and had been a major contributor to the government revenue collection.

Bankers have long been complaining about higher income tax compared to other businesses which pay only 25 percent in income tax on their taxable income.

In a memorandum submitted to the finance minister, the NBA has said that the tax should not be deducted on the payment of service charge that the banks while providing loans and other banking services.

The NBA also asked the government to incorporate a provision that would give the banks first rights on the collateral. In the case of housing projects that went bust, they have mentioned, multiple stakeholders have laid claims to property of the developers, further complicating the loan recovery process. Those who had booked the apartments and paid for that have made claims on the property put up as collateral by the developers while taking out loans from the banks.

The NBA has also demanded the exemption of the capital gain tax saying that proceeds from the sales of land put up as collateral would not cover the loan amount. Complaining about their business being affected by donation drive, the apex body of bankers also asked the government to exempt such amount from taxation.

Source: The Kathmandu Post