Former NRB Governor Rawal Criticizes Government's Decision to Tax FPOs and M&A Gains

Former Governor of Nepal Rastra Bank, Dr. Tilak Rawal, has expressed his concerns over the government's decision to impose taxes on Follow-on Public Offerings (FPOs) and mergers, describing it as an immature move. According to him, the current finance minister appears to be following the footsteps of his predecessors in implementing tax measures without considering the potential consequences.

Dr. Rawal emphasized the need for a thorough investigation by a high-level study committee before imposing such taxes, even if the Auditor General has recommended them. He warned that this decision could have a significant impact, particularly on banks and financial institutions. The role of the central bank was also highlighted as crucial in addressing this issue, with Dr. Rawal suggesting that they take a stand on the matter.

Regarding the focus on taxes in recent discussions, Dr. Rawal questioned the reasoning behind it, emphasizing the importance of maintaining a balanced monetary policy for Nepal. He stressed the significance of monitoring both internal and external conditions, citing the impact of the Russia-Ukraine war on the country's economy and consumers. In his view, the National Bank's priority should be managing inflation effectively.

MUST READ: What is the Contention Surrounding New Taxation Provisions for FPO Premium and M&A Gains ?