Saturday, July 27, 2013

Nepal to sign DTAA with Malaysia soon

Finance Minister Shankar Prasad Koirala said that the government is going to sign a Double Taxation Avoidance Agreement (DTAA) with Malaysia soon.
Addressing the first anniversary of Air Asia X flight to Kathmandu, he also requested the Malaysian investors to invest in Nepal as the government is soon sending a team to Kuala Lumpur to finalise the DTAA with Malaysia that will help boost Malaysian investors confidence.
The country has already signed DTAA with countries – including major trading partners like India and China – to make foreign investors coming to Nepal more comfortable.
Former finance minister Barsha Man Pun had also planned to enter into DTAA with all the SAARC countries – within the last fiscal year 2012-13 – to encourage intra-regional investment, though he failed to finalise a single one.
Increased connectivity between Kuala Lumpur and Kathmandu also due to Air Asia X will not only boost Malaysian tourists but also help boost investment inflow to Nepal, Koirala said, adding that the government has created investment-friendly environment in the country to attract more foreign investment.
Currently, Air Asia X – a Malaysian budget airliner that started two flights a week on Kuala Lumpur-Kathmandu route from July 3, 2012 – flies five times a week and is popular among the Nepali migrant workers.
Malaysia as the top Nepali migrant worker destination is not only the major source of remittance that has become the lifeline of economy but also could be a major foreign investment source country, he added.
The increased air connectivity has also helped increase trade between the two countries lately as Malaysia is also the seventh largest exporter for Nepal. In the first 11 months of the last fiscal year 2012-13, Nepal imported Rs 5.40 billion worth merchandise from Malaysian, whereas in the same period of a fiscal year ago, in 2011-12, Nepal had imported Rs 5.47 billion worth merchandise, according to the figures of Trade and Export Promotion Centre (TEPC).
Nepal suffers trade deficit with Malaysia and increased Malaysian investment could help bridge the gap. In the year 2012, Nepal had imported Rs 5.96 billion worth merchandise from Malaysia, whereas exported Rs 113.03 million worth merchandise only, the data revealed.
Malaysia is also the key employer for Nepali migrant workers. According to Department of Foreign Employment’s data, Malaysia has displaced Qatar as the Nepali migrant workers’ destination in the last fiscal year 2012-13.
“Nepali migrant workers’ departures to Malaysia have increased by 60 per cent in the last fiscal year to 156,770 compared to 98,367 a fiscal year ago 2011-12. “Malaysia contributes to 34.56 per cent of the total number of Nepali migrant workers going abroad for employment,” the department’s data revealed. 

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