Small scale entrepreneurs to get huge exemption in income tax; 20 per cent tax exemption on the income of the tourism entrepreneurs

The government is to provide huge exemption in the income tax for the entrepreneurs running small scale enterprises.

Unveiling the budget for the fiscal year 2020/21 in parliament, Finance Minister Yubaraj Khatiwada said that 75 per cent exemption has been made in the income tax for the entrepreneurs who record transactions worth Rs 2 million annually.

Similarly, those doing transaction upto Rs 5 million would be exempted tax by 50 per cent and 25 per cent to those tax payers doing transaction upto Rs 10 million.

The period for income tax exemption for micro-enterprise has been extended to seven from existing two years while small scale women entrepreneurs would avail tax exemption scheme for 10 years from existing 7 years, Minister Khatiwada said.

The Minister also shared that the value added tax on the micro insurance has been removed.

Likewise, the government is to provide up to 20 per cent tax exemption on the income of the tourism entrepreneurs involved in businesses related to air services, transportation, hotel, travel and trekking sector.

The time for filing value added tax and tax for tourism transport and cinema houses has been made quarterly.

The custom duty on raw materials reports for Ayurvedic medicines has been waived while exemption has been granted on custom duty for export seeds of rice, maize, wheat and vegetables. However, the custom duty for export of other primary agricultural produces has been increased.

Furthermore, excise duty for domestically produced ethanol used as raw materials for sanitizers and personal protective equipment have been waived.

Custom duty has been increased in petroleum products (expect for aviation fuel and LPG) and gold and golden jewelry.

Excise duty has been levied on export of all sort of furniture to conserve local furniture.
Income tax has been exempted by cent per cent to the drinking water and sanitation consumer user group.

Also, the income tax has been exempted on all sort of cooperatives being run in the rural municipality while the cooperatives in Municipality has been provided 5 percent income tax exemption, 7 per cent to that run in Sub-Metropolitan City and 10 percent to that in Metropolitan City.