Entrepreneurs demand hike in VAT threshold
KATHMANDU, JULY 10:
Entrepreneurs today demanded to raise the current Value Added Tax (VAT) threshold.
“Government should hike the threshold from current Rs 2 million to Rs 8 million, said president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Suraj Vaidya in a programme organised by Finance Ministry to release report prepared by Revenue Advisory Committee, today.
The current VAT Act has made it mandatory for VAT registration for those firms whose annual transaction exceeds Rs 2 million. But it is voluntary for those, whose annual turnover is below the threshold.
The threshold amendment will help control VAT fraud, he claimed, also asking the government to create an independent Revenue Board to effective revenue mobilisation. “An independent board is a must to solve dispute between the government and the entrepreneurs,” Vaidya added.
In its report, the Revenue Advisory Committee has suggested the government to create conducive environment for the domestic and foreign investment and to adjust the customs tariff according to global and regional trade agreements like WTO, SAFTA and BIMSTEC compliance.
It has also suggested to expand tax and non-tax revenue base and bring a separate policy to reduce energy crisis and address problem in capital market.
Meanwhile, caretaker finance minister Barshaman Pun said the government is preparing four different types of budget draft for the fiscal year 2012-13 due to political uncertainty and lack of consensus.
The UCPN-Maoist leader Pun — whose party had manhandled the then finance minister Surendra Pandey and snatched the budget briefcase while he was presenting the budget in the Parliament in 2010 — said that the economy will suffer, if political parties will fail to forge consensus to bring full-fledged budget.
He claimed that he is bring the budget keeping in mind the long term development of the country, rather than short term gain and popularity. “Everyone can check my credibility after announcement of budget,” he claimed, adding that neither he nor his party has any intention to do politics in budget.
Finance secretary Krishna Hari Baskota, on the occasion, said that the revenue mobilisation trend has been shifted in the latest years. “The primary source of revenue was customs duty until some years back,” he said, “But the trend has been changed now and VAT and Income Tax has surpassed customs duty as the largest contributors to the government coffer.”
“VAT and Income Tax has contributed 31 per cent and 21 per cent to the total revenue mobilisation, respectively,” he added.
Source: THT
