Nepal Chamber of Commerce Highlights Budget Challenges and Positives for FY 2081/82

The Nepal Chamber of Commerce has expressed concerns over the implementation of the government’s budget for the financial year 2081/82, despite finding it realistic and moderate. The 18 Kharba 60 Arba 30 Crore rupee budget aims to revive the economy from recession, but achieving this will be challenging. The Chamber highlights the difficulty in meeting the revenue collection target of 12 Kharba 60 Arba 30 crore rupees and the potential negative impact on market liquidity from raising domestic debt equivalent to 30% of the total budget.

Positive aspects of the budget include its focus on agriculture, tourism, energy, IT, and manufacturing. The Chamber supports the declaration of the next financial year as the year of economic reforms and the establishment of a commission for the second phase of economic reforms. Additionally, it praises initiatives like declaring 2081-2091 as the Agriculture Investment Decade, promoting tourism to attract 16 lakh tourists, and enhancing domestic production to replace imports and boost exports. The Chamber also commends efforts to promote self-employment through entrepreneurship among citizens returning from foreign employment.

Nepal Chamber of Commerce's Opinion on the Financial Year 2081/82 Budget:

1. The budget is realistic and moderate, but implementation is challenging.

2. Reviving the economy from recession in the next financial year is a big challenge.

3. Declaring the year for economic reform and creating a commission for second-phase reforms is positive.

4. The revenue target of 12.6 billion rupees is challenging given the current economic situation.

5. Raising domestic debt to nearly 30% of the budget could negatively impact market liquidity and the economy.

6. Focusing the budget on agriculture, tourism, energy, IT, and manufacturing is positive.

7. The IT decade's goals, including fellowships, internships, and advanced IT facilities, are positive.

8. Maintaining a favorable tax system is crucial for boosting private sector morale.

9. Cancelling excise tax on vegetables and fruits is a positive step.

10. Private sector involvement in electricity transmission and distribution, and increasing capacity by 900 MW to 4,500 MW is positive.

11. Declaring 2081-2091 as the Decade of Agricultural Investment is positive for modernization and investment in agriculture.

12. The tourism promotion program aiming to attract 1.6 million tourists is positive.

13. Programs to increase domestic production, substitute imports, and boost exports are positive.

14. Business incubation in each province and encouraging bank credits for new developments are positive.

15. Addressing tax disputes and resolving tax assessment issues is positive.

16. Reducing duty on raw materials compared to finished goods and supporting domestic industry is positive.

17. Not increasing the income tax exemption limit is a negative aspect.

18. Raising the VAT registration threshold to 30 lakhs is positive.

19. Promoting self-employment for citizens returning from foreign employment is positive.

20. Returning up to Rs 5 lakh to savers in cooperative disputes is commendable.

21. Selling reduced carbon energy or increased carbon reserves is positive for environmental sustainability.

22. Linking corporate social responsibility programs with the sports sector is positive.

23. Developing 50,000 housing units with government and private sector participation is positive.

24. Including benefits for small traders and promoting women's entrepreneurship is positive.

25. Increasing customs duty on sensitive goods like medicine and surgical items is problematic.

26. The increased customs duty on veterinary medicine should be reduced.

27. Excise duties on locally produced goods, except harmful alcohol, should be removed.

28. Increasing paper customs duty by 5% negatively impacts the printing industry.

29. Legalizing commercial production of medicinal cannabis should be effectively implemented.