No changes in VAT regime: FinMin

KATHMANDU, JUN 20 -

The private sector’s demand for multiple value added tax ( VAT ) rates will not be addressed in the upcoming budget. The government is also not keen on increasing the VAT threshold.

Finance Minister Shankar Prasad Koirala on Wednesday made it clear the new budget will neither change the VAT threshold, nor will it introduce multiple VAT rates. “The government is not in a position to make changes in the VAT regime,” said Koirala at a pre-budget discussion organised by the Confederation of Nepalese Industries (CNI) here.

The existing threshold for VAT registration is Rs 2 million, and business entities will annual turnover below the threshold is exempted from VAT which stands at 13 percent. The private sector has been demanding multiple VAT rates arguing it would enable the government to mobilise more revenue by plugging under-invoicing problem, among others.

Koirala, however, said the government will address issues related to tax. He said the budget for the next fiscal year will focus on development. “Although there are elections next year, the full-fledged budget will focus more on development expenditure,” he said.

Stating the private sector has a significant role in developing the country’s economic status, he ensured the budget will try to incorporate the private sector’s concerns as much as possible.

CNI President Narendra Kumar Basnet said the government has to focus on investment promotion, export promotion and import substitution. “For this, the budget should be private sector friendly,” he said.

CNI President Emeritus Binod Chaudhary said sectors like industry, energy and tourism could not flourish as they have been “entrapped by revenue and remittance”.

Source: The Kathmandu Post