Private sector, finance ministry at loggerheads

The Maoist-led government and the private sector are again at loggerheads over a contentious aspect of the Voluntary Disclosure of Income Sources (VDIS) scheme – the investigation on the current investment. The private sector wants the government not to probe source on all the investments till date. But the finance ministry is firm on investigating investment on unproductive sectors.
This lack of clarity over investigation of investment sources has been riling private entrepreneurs for the past few weeks. The confusion has come to the fore even as the government bowed to popular demand and extended the VDIS deadline by a month till March 13. Industry captains have urged the government to identify the productive and unproductive sectors in a bid to attract more investment. “Otherwise, investors will be discouraged,” said Federation of Nepalese Chambers of Commerce and Industry (FNCCI) president Kush Kumar Joshi.
Addressing media people here today, he accused the government of working at cross purposes. “On one hand, it claims to provide security to investment while on the other it plans to probe sources of investment,” he said. The president of the umbrella organisation of the private sector urged the ruling coalition to desist from the probe.
“The industries that are already in the tax net and providing employment should be spared,” he added. Joshi rather suggested to expand the tax net.
Of late, the government has hinted at not investigating the sources of investment in hydropower projects and also of industries that have more than 500 employees on their payrolls – the move hailed by the private sector and expected to discourage the investment on unproductive sectors.
Joshi hauled up the government for the prolonged power cut, which is having an adverse impact on business. The government’s move on not investigating the source of hydropower projects will encourage more investment on power projects.
Earlier, the Finance Ministry collected Rs 1.42 billion through VDIS, exceeding its initial target of Rs 1 billion.Nepal Chambers of Commerce (NCC) president Surendra Bir Malakar said that record revenue could be collected due to the support from the industrialists. “However, we will take to street if the government forces us to come up with the sources of investment,” he warned.FNCCI chief Joshi warned of an economic crisis if the cordial ties between the government and private sector were snapped.The FNCCI, NCC, Confederation of Nepalese Industries (CNI), Hotel Association of Nepal (HAN) and Nepal Overseas Export-Import Association representatives have been involved in discussions with the finance ministry on the VDIS scheme and investigating the source of investment for the last two weeks. But half the month has already passed without any agreement between the government and private sector.