BUDGET BUZZ: Facilitate aviation sector

Aviation sector is one of the growing sectors that has tremendous potentials in Nepal.However inconsistent policy of the government has hit the growth of the aviation sector. The budget for the fiscal year 2009-10 should ensure that the aviation sector -- one of the major revenue contributors to the national coffer -- be facilitated.

The budget should exempt Value Added Tax (VAT) on imports of spare parts for the aircraft. The airlines cannot charge VAT on the tickets for passengers but it has to pay VAT while importing spare parts for the aircrafts that is not practical.

The budget should widen the income tax exemption bracket to Rs 2,00,000. The present tax exemption bracket is not practical as the salary scale of low-and-middle level employees has gone up.

The budget should encourage the taxpayers by making them feel that the state and tax authority is responsible to its citizen.

Unless the state assures the taxpayers that their money has been utilised in building infrastructure, health care and education along with the state's commitment to provide basic securities the taxpayer will not be inclined to pay taxes and any tendency to evade tax cannot be morally challenged. This budget should reflect the accountability of taxpayer's money.

The budget should ensure that tax laws be reviewed to curb discretionary powers of the tax authorities and clarify prevalent ambiguities. This will decrease corruption and encourage people to pay tax. Also, tax procedures should be simplified for hassle-free tax payment.

Birendra Bahadur Basnet

managing director

Buddha Air