Nepal Chamber of Commerce Welcomes Budget Measures, Flags Some Tax Concerns

The Nepal Chamber of Commerce has stated that the overall budget appears ambitious, and if effectively implemented, it could help accelerate economic growth.

The Chamber has appreciated several positive provisions in the budget, including an increase in personal income tax exemption to Rs 1 million and a reduction in the top income tax rate.

It also welcomed lower customs duties on industrial raw materials, removal of numerous excise duties, simplification of the tax system, and reforms related to capital gains tax, company liquidation, and investment facilitation.

Other supportive measures include incentives for IT exports, promotion of AI development, permission for private sector electricity trading, easier foreign investment procedures, and initiatives to strengthen agriculture, digital economy, and industrial competitiveness.

However, the Chamber has expressed concern over certain provisions that may negatively impact the private sector. These include new taxes on private educational and health institutions, VAT on higher electricity consumption, increased capital gains tax rates, higher customs duties on gold and silver, and additional charges on electric vehicles.

Overall, the Chamber believes that if the budget is implemented effectively, it could support investment growth, improve business confidence, simplify taxation, and enhance overall economic activity, despite some challenging tax measures.