लाभकर 'टेलियाबाटै'

सरकारले एनसेल खरिदबिक्री प्रकरणमा त्यसबापत पुँजीगत लाभकर एनसेल बिक्रेता कम्पनी टेलियाबाटै असुल्ने निर्णय गरेको उपप्रधान तथा अर्थमन्त्री कृष्णबहादुर महराले बताएका छन्। उनका अनुसार सार्वजनिक लेखा समिति र अर्थ समिति निर्णय एवं प्रचलित कानुनकै आधारमा लाभकर तिर्ने दायित्व टेलियाको भएको निर्णय गत बुधबार भएको हो।
अर्थमन्त्री महराले बुधबार लेखा समितिको जेठ १६ र अर्थ समितिको जेठ २१ को निर्णयअनुसार मन्त्रिपरिषद्ले एनसेल खरिदबिक्री प्रकरणमा लाभकर तिर्ने दायित्व टेलियाकै रहेको ठहर गरेको जानकारी दिएका हुन्।

 

• विगतदेखि हालसम्म भएको एनसेलको शेयर खरिद बिक्री र उक्त खरिद बिक्रीमा विक्रेताबाट असुल्न हुनुपर्ने पुजिगत लाभकर वापतको रकम असुल नगर्ने निकाय एवं जिम्मेवार प्रमुखको सन्दर्भमा समेत अनुसन्धान र छानविन गरि तीन महिनाभित्र यस समितिलाई प्रतिवेदन दिन अख्तियार दुरुपयोग अनुसन्धान आयोगलाई लेखि पठाएको

नेपालको कर्पोरेट इतिहासकै सबैभन्दा ठूलो तथा चर्चित एनसेल खरिदबिक्रीमा टेलियाले कर छलेको विषयमा अख्तियार दुरुपयोग अनसुन्धान आयोग भने रहस्यात्मक रुपमा मौन छ। लेखा समितिले विगतदेखि हालसम्म भएको एनसेल सेयर खरिदबिक्री र उक्त खरिदबिक्रीमा बिक्रेताबाट असुल हुनुपर्ने पुँजीगत लाभकरबापतको रकम असुल नगर्ने निकाय एवं जिम्मेवार प्रमुखको सन्दर्भमा समेत अनुसन्धान गरी तीन महिनाभित्र समितिलाई प्रतिवेदन दिन आयोगलाई निर्देशन दिएको थियो।
लेखा समितिले एनसेल खरिदबिक्रीमा नेपालले आयकर र कानुनबमोजिम लाग्ने पुँजीगत लाभकर बिक्रेताबाट यथाशीघ्र असुलउपर गर्न र तत्सम्बन्धमा आवश्यक व्यवस्था गर्न सरकार र सरोकारवाला मातहत निकायलाई निर्देशनसमेत दिएको थियो।सरकारले १० महिनापछि गत बुधबार मात्र मन्त्रिपरिषद्बाट एनसेल बेच्ने स्विडिस कम्पनी टेलियासोनेराबाट नेपाल सरकारले पाउनुपर्ने पुँजीगत लाभकर तिराउने निर्णय गरेको हो। सोहीअनुसार बैठकले लाभकर उठाउन अर्थ मन्त्रालयलाई निर्देशन पनि दिएको छ।यसअघि अन्य संसदीय समितिले पनि लाभकर उठाउन सरकारलाई पटक–पटक निर्देशन दिँदै आएका थिए। तर, विभिन्न समितिले दिएका पटक–पटकका निर्देशन र जनदबाब बढ्दै गएपछि सरकारले पुँजीगत लाभकर बिक्रेताबाट उठाउने निर्णय गरेको हो। एनसेल बिक्रेता टेलियासोनेरा स्विडेनको सार्वजनिक कम्पनी हो।गत वर्ष पुसमा स्विडिस कम्पनी टेलियासोनेरा (हालको टेलिया) ले मलेसियन कम्पनी एक्जियटालाई एनसेल बिक्री गर्दा नेपाल सरकारले पाउनुपर्ने पुँजीगत लाभकर छलेको थियो। झन्डै १ खर्ब ४० अर्ब रुपैयाँमा कारोबार भएको नेपालको सबैभन्दा ठूला कर्पोरेट किनबेचमा दुवै कम्पनी विदेशी भएको र 'अफसोर डिलिङ' भएको भन्दै टेलियासोनेराले पुँजीगत लाभकर तिर्नु नपर्ने भन्दै नेपालबाट बाहिरिएको थियो।नेपाली कर प्रशासनले टेलिया नेपालबाट बाहिरिएपछि मात्रै कर उठाउने प्रक्रिया सुरु गरेको थियो। अख्तियार पनि छानबिनमा उदासीन देखाएको तथा कर उठाउने मौका हुँदाहुँदै आन्तरिक राजस्व विभागका महानिर्देशक चुडामणि शर्माले संसदीय समितिमा उपस्थित भएरै टेलियाले नेपालमा कर तिर्नु नपर्ने बताएर सरकारलाई अर्बौं रुपैयाँ घाटा लगाएका छन्।संसदीय समितिले ठूला करदाता कार्यालय एनसेलसँग कति पुँजीगत लाभकर लिनुपर्ने हो, उक्त रकम स्पष्ट गर्न निर्देशन दिएका थिए। कर कार्यालयले एनसेलबाट कति पुँजीगत लाभ लिनुपर्ने भन्ने हिसाब निकालेको छैन। यता, ठूला करदाता कार्यालयको पटकपटक अनुरोध लत्याउँदै टेलियासोनेराले कर नतिर्ने बताउँदै आएको छ।एनसेल कारोबारमा टेलियासोनेराले आफ्नो स्वामित्वमा रहेको ६०.४ प्रतिशत सेयर एक्जियटालाई र निरज श्रेष्ठका नाममा रहेको २० प्रतिशत सेयर भावना श्रेष्ठलाई बिक्री गरेको थियो। निरजका नाममा रहेको २० प्रतिशत सेयर ४ करोड ८० लाख डलर अर्थात् ४ अर्ब ८० करोड रुपैयाँमा बिक्री गरेको थियो। भाइजर समूहमा बाँकी रहेको १९.६ प्रतिशत सेयर पनि एक्जियटाले लिएको थियो।

 

• एनसेलको खरिदविक्रीमा नेपालको आयकर कानून बमोजिम लाग्ने पुजिगत लाभकर विक्रेताबाट यथाशिघ्र असुल उपर गर्न र तत्सम्बन्धमा आवस्यक ब्यवस्था गर्न नेपाल सरकार (मन्त्री परिषद्), अर्थमन्त्रालय, उद्योग मन्त्रालय, आन्तरिक राजस्व विभाग, कम्पनी रजिष्ट्रारको कार्यालय र नेपाल दूर संचार प्राधिकरणलाई निर्देशन

अहिले एनसेलको सम्पूर्ण सेयर एक्सियटा (८० प्रतिशत) र भावना श्रेष्ठ (२० प्रतिशत) मा छ। कानुनअनुसार विदेशी लगानी भएको कुनै पनि कम्पनीमा नेपाली नागरिकको कम्तीमा २० प्रतिशत सेयर हुनुपर्ने नियम छ।
एनसेलको सञ्चालक टेलिया र एक्जियटाबीच १ खर्ब ४० अर्ब रुपैयाँमा कम्पनी खरिदबिक्री भएकोमा उक्त कारोबारमार्फत करिब ४४ अर्ब ९३ करोड रुपैयाँ लाभकर राज्यले पाउनुपर्ने ठहर गरिएको छ।केही सरकारी अधिकारीसँगको मिलेमतोमा लाभकर नतिरी नेपाल छाडेको टेलियाले नेपालमा सञ्चालन गरे पनि उसले विभिन्न देशमा स्थापित कम्पनी टेलियाले जस्तोसुकै संरचनामार्फत लगानी गरेको भए पनि बेचेको नेपालमा रहेको कम्पनी भएकोले नेपालमा उसले लाभकर तिर्नुपर्नेमा भावनामा बहेर कानुनको गलत व्याख्या गर्दै नेपाल सरकारको लाभकर पाउने अधिकार गुमाउँदा यसले गलत नजिर बस्ने देखिन्छ।टेलिया नेपालमा लाभकर तिर्न अस्वीकार गरेपछि आफ्नै देशमा समेत आलोचित बनेको छ। ठूला करदाता कार्यालयले भने अनुसन्धान गरिरहेको तर टेलियाले नेपालमा कर तिर्न कुनै कानुनी आधार नरहेको जनाएको छ।आयकर ऐन, २०५८ मा लाभकर बिक्रेताले तिर्नुपर्ने स्पष्ट व्यवस्था छ भने विश्वव्यापी मान्यताअनुसार पनि बिक्रेताले नै लाभकर तिर्नुपर्ने व्यवस्था रहेकोमा नागरिकको इमेलको जवाफ लेख्दै टेलियाकी प्रेस अधिकृत जोहने ह्यान्सनले टेलियाले नेपालबाहिर गरिएको खरिदबिक्रीमा नेपालमा लाभकर नलाग्ने आफ्नो कम्पनीको पुरानो अडान परिवर्तन नभएको जनाइन्।

Government committed to fight flow of dirty money

The government is fully committed to combating the flow of dirty money that propagates financial crime, according to a central bank official.
Speaking at a learning event ‘Anti-Money Laundering and Terrorist Financing (AML/TF) in Nepal’ for young entrepreneurs, organised by the Entrepreneurs’ Organisation (EO) Nepal in Kathmandu today, deputy director of Financial Information Unit under the central bank Hari Kumar Nepal said that government was fully committed to control any form of financial crime including money laundering and tax evasion.
The government is mulling over introducing more stringent rules in the near future to minimise chances of money laundering, he said, adding that the central bank will soon have regulations like prohibition of cash transaction higher than Rs 1 million and prohibit use of savings account for business transactions. "We hope that this will contribute in controlling money laundering."
Money Laundering and Terrorist Financing is no longer the issue of Nepal only, it has drawn attention of governments all over the world and other international organisations,” he said, adding that the government was serious on the issue and that it will leave no stone unturned to eradicate such practices.
He also said that money laundering has worsened not only the business sector, but also politics and administration. The event basically focused on demarcation between money laundering and tax evasion, legal frameworks and contribution of business sector to control it.
“Surveys show that more than 3.6 per cent of global GDP is earned through criminal activities,” Nepal said, adding, "If we add amount of tax evasion to it, the result is shockingly high. But one has to be aware of the fact that each and every business started with black money is a crime. And, one cannot get peace of mind with black money."
He also said that tax evasion supported by corruption is the biggest challenge of Nepal.
“It starts right from a general landlord to show low rental charge to evade tax," Nepal added. "So, it is very much difficult to bring this all in track."
Stating that though the country still lacks stringent rules to tackle financial crimes, Nepal said it is unlikely for anyone engaged in such illegal activities to go scot-free.
The event was followed by an interaction session where young entrepreneurs and EO members shared their view on how business sector can work together with government to implement the measures to control financial crimes.

National Geographic lists Pokhara as Best Spring Trips 2017

Pokhara has made it to the list of the destinations not to be missed in the spring of 2017.
The National Geographic travel magazine has recommended 12 destinations around the world to visit in this spring and Lake City Pokhara of Nepal finds its place on its list of Best Spring Trips 2017.
The UK-based popular travel publication with a theme ‘Hit a travel high in the beauty of this Himalayan city’ has described Pokhara as a hidden gem for adventurous travellers.
“Soaring over the Pokhara City delivers adrenaline-junkie Himalaya views without the hiking,” it writes, adding that Pokhara – a gateway to Nepal’s Annapurna region – is considered one of the world’s top spots for paragliding due, in part, to jaw-dropping views of glaciers, lakes, and snow-covered peaks. "No experience is required to ride on a sunrise paragliding tandem flight."
Options include the relatively tame Cloud Buster (20- to 30-minute) scenic flight, a longer (45- to 60-minute) Cross-Country tour, and the spinning-and-spiraling Acrobatic Flight, it further writes. "Before launching from Sarangkot (2,000 feet above the Pokhara Valley), snap a picture of Pokhara's majestic mountain triple crown-26,795-foot Dhaulagiri, 26,040-foot Annapurna II, and 26,781-foot Manaslu," it adds.
The other destinations that are made it to the list include Cape Town of South Africa, Eastern Europe, Central Park, Olympic National Park, Philadelphia of USA, Suzhou of China, Great Barrier Reef of Australia, Balloon Rally of Washington, USA, Los Glaciers National park of Argentina, Aogashima of Japan and Bubble Lodges of France.

Government releases Rs 5 million each to 744 local units

The Finance Ministry has released Rs 5 million each to the 744 new local units. A cabinet meeting last week had decided to provide at least Rs 10 million each to the local units.
Talking to journalists at the ministry today, deputy Prime minister and finance minister Krishna Bahadur Mahara said the ministry has released Rs 5 million as the seed money for the basic infrastructure of the local units. "The newly formed 744 local units will each get Rs 10 million,” he said, adding that Rs 5 million has been immediately released, and the remaining amount will be released on the basis of budget usage.
The ministry has released Rs 3.5 billion from the 'miscellaneous budget head' under the Finance Ministry. "The seed money will help the newly-formed local bodies manage their staff, and construct physical infrastructure,” he said, adding that the amount is a grant to the local units. “Though the metropolises have their own resources for such works, the rural municipalities, currently do not have resources also to set up new structure too.”
The government has – in order to implement federalism – formed a total of 744 local units including 4 metropolises, 13 sub metropolises, 246 municipalities, and 481 rural municipalities, and they have started setting up their offices from Monday.
The government has sent joint secretaries to the metropolises, under secretaries to the sub metropolises and municipalities, and section officers to head the rural municipalities, he informed.
Mahara, on the occasion also informed that the ministry has already released Rs 10 billion for the Election Commission for the local election, and Rs 10 billion will be provided to the Home Ministry. "Though the Home Ministry has asked for Rs 31.75 billion for security arrangements for the local election, we are trying to add more budget for them according to the need,” he added.
The government has allocated Rs 20 billion for the local election that is slated for May 14 this year.

Government delaying action against tax cheaters

Despite clear direction of the Parliamentary Accounts Committee (PAC) to investigate and penalise responsible authorities for not recovering capital gains tax (CGT) from the seller of GSM operator Ncell, concerned authorities, after 10 months of the shares transfer, are arguing on who should pay the CGT.
According to domestic and international laws, the CGT has to be paid by the seller.
Though PAC, on May 29, wrote to the Commission for the Investigation of Abuse of Authority (CIAA) to investigate the transaction from the very beginning and penalise the officials responsible, neither the CIAA nor the government has heeded the PAC directive.
The government could lose the CGT, if the dilemma and misinterpretation of the law continues any further.
Albeit late, the cabinet last week decided to recover capital gains tax (CGT) from the seller ie Swedish telecom operator TeliaSonera on the basis of decision of the Public Accounts Committee (PAC) of May 29 and Finance Committee of June 3.
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around US$ 1.03 billion in April last year. Reynolds Holding was TeliaSonera's wholly-owned subsidiary registered at Saint Kitts and Nevis, a tax haven.
The TeliaSonera had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region. The Swedish firm had sold a 60 per cent stake in Ncell and also dissolved its interest in an additional 20 per cent stake owned by local partner in December 2015. Ncell officially became a part of Axiata Group Bhd on April 12, 2016.
But the Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal.
The largest transaction in Nepali corporate history has been in news – affecting Ncell's plan to rollout 4G services – also due to some of the responsible government officials, including director general of Inland Revenue Department Chudamani Sharma and chief of the Large Tax payers' Office (LTO) Shovakanta Poudel. Sharma has been claiming that TeliaSonera does not need to pay CGT in Nepal, whereas Poudel has not yet calculated how much CGT the government owns to the TeliaSonera, currently Telia.
TeliaSonera has been however claiming that there is no need to pay CGT in Nepal since the transaction had taken place elsewhere. Responding to an email query press officer of TeliaSonera Johanna Hansson said that recent reports in Nepali media do not change TeliaSonera's view on the tax situation. "We are still of the firm belief that Telia should not pay CGT on the international part of the transaction relating to the sale of Ncell," she added.

NEA plans six cross-border interconnection corridors

Nepal Electricity Authority (NEA) has identified six cross-border interconnection corridors and 11 transmission lines with 22,000 MW generation capacity added within 2035.
Speaking at an interaction on Transmission Network System of Nepal organised by Energy Development Council (EDC) in Kathmandu today, managing director of NEA Kul Man Ghising said that the power utility has identified and planned six cross-border
Interconnection corridors and 11 transmission lines with a proposed 22,000 MW generation within 2035, as part of its strategy to optimise the energy grid.
Saying that a robust transmission and distribution system is the need of the hour for reliable power supply he informed that NEA was also going to study the requirements and feasibility of major transmission projects such as East-West transmission highway of 400 kV and 765 kV, Mid-hill transmission corridors of 400 and 220 kV, and North-South corridors of 220 and 400 kV.
He, on the occasion, also highlighted the current structure of transmission network in Nepal.
The discussion that featured talks from various stakeholders in the energy sector of Nepal saw officials from NEA and Independent Power Producers (IPPs) brainstorm on an outline on the current power scenario of Nepal.
On the occasion, IPPs also lamented discrimination by NEA while evacuating power. They said that compensation rate is different for different hydropower projects – from 45 per cent to 90 per cent. “Therefore, NEA has to be transparent and equal to power producer companies,” they said, adding that there was a special provision for transmission line for foreign producers but not to domestic producers.
The IPPs also stressed the need for a stable policy and more coherent approach from NEA. Giving an example where the construction of double-circuit instead of single-circuit could have evacuated more energy, they further said that IPP are ready to adopt Build-Own-Operate-Transfer (BOOT) model or even take the responsibility in land acquisition and procurement if allows. “IPPs are ready to adopt any favorable modality and are open to help the NEA to build transmission line,” they said, asking the government power utility to end the discrimination on transmission line construction. "There is a special provision for transmission line for foreign producers but not for national producers and that needs to end," they added
On the occasion, managing director of Liberty Energy Atma Ram Ghimire stressed the need for a stable policy and more coherent approach from NEA. Giving an example, where construction of double circuit instead of a single circuit transmission line could evacuate more energy and avoid duplication, he said that NEA has to synchronise the effort and have better coordination.
NEA has given top priority to install double circuit high capacity transmission network to enhance the quality of power supply.

Low-spending projects to be told to surrender budget

The Finance Ministry has started the process to withdraw budget from projects that have failed to spend till the end of the eighth month – by March 13 – of the current fiscal year.
Chief of Budget Division under the ministry Madhu Marasini said that the Finance Ministry has written all the ministries to submit the reports of the progres of the projects under them within a week. "After we get their reply, the ministry will decide whether to direct them to surrender funds," he added.
Though, the Finance Ministry is responsible for the resource mobilisation only, the low progress of some of the big ticket projects have defamed the government pressuring it to transfer the budget to the projects that have been performing better.
According to the Financial Comptroller General's Office (FCGO), the government has, by Monday, been able to spend only 38.15 per cent or Rs 400.16 billion, out of the total budget of Rs 1048.92 billion for the current fiscal year.
Of the total spending, capital spending stands at Rs 67.82 billion or 21.74 per cent, which reveals the pathetic condition of the perfromances of the development projects.
The Finance Ministry has told all the ministries to either expedite the development projects or surrender the budget and it will transfer the budget to the projects like Rani-Jamara-Kulariya Irrigation project that is performing better.
According to the ministry, some national pride projects like second International Airport Nijgadh, Kathmandu Nijgadh Expressway are not peforming well. The government had in the budget for the current fiscal year earmarked some Rs 10 billion for these projects but they have not been able to spend.
The ministry attributes the lower performance of the national pride projects and other projects as they have been allocated budget without enough homework, detail project report and study.
The three ministries that have received almost half of the total capital budget have utilised only a quarter of available funds so far, according to the FCGO.
The Ministry of Physical Infrastructure and Transport, the Office of Prime Minister and Council of Ministers, and the Ministry of Federal Affairs and Local Development were allocated a capital budget of Rs 135.9 billion – which is 44 per cent of the total capital budget of Rs 312 billion – for the current fiscal year.
But they, however, have spent only Rs 34.6 billion – which is only 25 percent of the total allocation – in the first eight months of the fiscal year, the latest data of the FCGO revealed.
"The worst performer was the Prime Minister’s Office, which was allocated a capital budget of Rs 35.3 billion which is 11.3 per cent of the total capital budget, has spent only Rs 2.7 billion or 7.8 per cent," the data revealed.
Prime Minister’s Office couldn’t spend capital budget because of low fund absorptive capacity of the National Reconstruction Authority (NRA), said joint secretary and spokesperson of the Prime Minister’s Office Damodar Regmi.
Though the authority has expedited the process of extending housing grants to earthquake survivors, it has not been able to utilise the allocated capital budget, he added.
The government’s capital budget includes funds allocated for the purpose of executing civil works, and purchasing land, building, furniture, vehicles, plants and machinery, among others.
Likewise, the Physical Infrastructure Ministry, for instance, was allocated a capital budget of Rs 72.7 billion, which is almost a quarter of total capital budget. The ministry, however, has spent only Rs 24 billion or 33 per cent of the total budget, in the eight-month period.
The performance of the Local Development Ministry has been even worse, with capital spending standing at Rs 7.8 billion or 28 per cent of the total allocation.

House approves amendment to Company Act

The Company Act Amendment Bill has finally been endorsed by the parliament.
The bill, which couldn’t get through the parliament on Friday due to lack of a quorum, was endorsed today. The new law is expected to simplify entry, operation and exit of companies in Nepal.
One of the key laws that could encourage prospective investors – both domestic and foreign – in Nepal, the amendment to the Company Act (2063 BS) has made things easier for companies, which are defunct for long and are looking to wind up their operations legally, according to industry minister Nabindra Raj Joshi.
The amendment has also relieved individuals and firms of liability to pay fees and fines piled up for several years. Such individuals and firms will have to pay only one per cent of their paid-up capital, according to a provision in the new law. Companies, which failed to report their operation details and pay liabilities for several years, can enjoy this facility for one time only.
“Around 50,000 defunct companies can benefit from this exit scheme,” according to the ministry.
According to the Act that has given exit chance to domestic and foreign firms in Nepal that are registered but are no longer in operation, any defunct firm can exist by paying 0.5 per cent of its paid-up capital or 0.5 per cent of due taxes that such companies owe to the government – whichever is less – in the next two years.
According to Joshi, the amendment, which started five years ago, has a number of provisions aimed at easing doing business and creating more jobs in the country.
“Apart from easy exit, the amendment has also made entry of a company easy,” Joshi said, adding that the amendments in the Company Act are expected to improve doing business environment and also attract private sector investments including foreign direct investments. "The Act has also given validity to online registration of companies and use of digital signatures."
With the introduction of online company registration three years ago, Nepal’s doing business indicator had progressed by five points.
The new law has also raised the threshold of paid-up capital of firms requiring compulsory formation of three-member auditors committee for auditing of their financial operations to Rs 100 million from existing Rs 30 million. Likewise, a firm can donate up to Rs 100,000 in a fiscal year up from Rs 50,000 in the existing law.
The legislature has also capped administrative cost of firms not distributing profit in the past year at 25 per cent of their annual expenditure. This measure is also believed to tighten screws on unscrupulous firms reporting loss by showing bloated meeting allowance and other unnecessary costs.
Similarly, the new Company Act has also increased the upper limit of number of promoters in a company from 50 to 101. The government has also introduced a provision whereby promoters of any company can participate in their annual general meeting (AGM) through video conference.

Telecommunication service providers must go public
Likewise, the new amendment has also made it mandatory for telecom companies having paid-up capital of Rs 50 million or above to float their shares to general public within the next two years. With such provision in the new law, private telecom operators will have to issue shares to the public in near future.
Except Nepal Telecom (NT), other five telecom service providers in Nepal are owned by the private sector. Among the private sector-owned telecom operators in the country, paid-up capital of United Telecom Ltd (UTL), Nepal Satellite Telecom and Ncell exceeds Rs 50 million. According to the Company Registrar Prem Kumar Shrestha, the provision is introduced for private telecom operators as they have comparatively higher direct every day linkage with the public.

NOC can import LPG from other countries

Nepal will be able to import cooking gas from countries other than India very soon.
A new clause is being inserted in the petroleum supply agreement to be signed between Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC), which is due for renewal this month.
"As the demand for cooking gas has been increasing by 20 per cent annually in India, we are including a provision that allows Nepal to import liquefied petroleum gas (LPG) from other countries as well," deputy executive director of NOC Sushil Bhattarai said at a meeting of Industry, Commerce and Consumer Welfare Committee of the parliament today. He also said that the IOC has also agreed to include such provision in the agreement. "The agreement after renewal allows Nepal to import cooking gas from other countries," he added.
Nepal currently imports around 30 tonnes of LPG from India every month.
Speaking at the meeting, NOC managing director Gopal Khadka said that the draft agreement also includes a provision that allows NOC to buy crude oil and give it to Indian refinery for processing, should IOC fail to supply fuel to Nepal as per the demand. However, NOC failed to incorporate the provision of compensation, in case IOC fails to maintain the smooth supply of petroleum products like last year during the Indian blockade for nearly six months.
The parliamentarians, on the occasion, directed the NOC to include a provision of compensation in the new Supply Agreement – since it is a commercial agreement – that would require IOC to compensate NOC at times of supply disruption from the IOC side.
"The new Supply Agreement should be signed in such a manner that it ensures uninterrupted supply from IOC to Nepal even during difficult times," coordinator of sub-committee Subash Chandra Thakuri said, adding that provision of compensation in the agreement itself will compel IOC to make supply regular.
NOC had not only incurred huge financial loss – amounting to billions of rupees – due to almost six months-long disruption in supply of petroleum products to Nepal from IOC last year, but the economy also suffered.
The NOC had then also written a letter to IOC seeking compensation for the financial loss that it incurred due to fuel supply disruption. The IOC had, however, remained mum back then.
The sub-committee also directed NOC to keep enough space in the agreement that would allows NOC to sign commercial petroleum deal with other nations and import fuel from other sources at times of difficulties. "Along with IOC, NOC also should sign commercial petroleum deals with other feasible nations,” Thakuri said, directing NOC to expedite the process of signing commercial fuel deal with China.
Though NOC and PetroChina of China had signed a memorandum of understanding a year ago to engage in commercial petroleum deal, they have not been able to materialise the historic deal that would break IOC’s monopoly in petroleum supply to Nepal.
A team from IOC had visited Kathmandu last week to hold discussion with the NOC team on the new agendas that are being included in the agreement.
The existing agreement was signed in 2012.
After the Indian blockade that ran for nearly six months, NOC is under pressure to include some provisions, including allowing Nepal to import petroleum products from other countries, compensation to NOC, if IOC failed to supply petroleum products as per the demand, in the draft. But the draft has not included these provisions, despite pressure from all quarters.
Addressing the meeting, Khadka said that the draft of the new Supply Agreement with IOC has introduced a provision that allows NOC to procure fuel from third country in case IOC is unable to supply petroleum products to Nepal as per demand.
Meanwhile, Khadka said that commercial fuel trading with China and other countries is only possible through government-level agreement. "If we are to diversify our petroleum trade, the government should hold government-to-government talks with governments of different countries," he said, hoping that the visit of Prime Minister Puspa Kamal Dahal to China next week will expedite the process for Nepal-China commercial fuel trade deal.
However, NOC has included some provisions like reducing marketing charge that IOC has been levying on fuel supplied to Nepal from 2.5 per cent to 2 per cent. It is expected to reduce NOC's cost of import by more than Rs 1 billion every year.
The review meeting of Supply Agreement between IOC and NOC held last week had decided to reduce the marketing charge in the new agreement that comes into effect from April 1.
The new agreement will be in force until March 31, 2022.
The new agreement also allows Nepal to import fuel from third countries if IOC is unable to ensure regular supply of petroleum products to Nepal.
Likewise, IOC has also agreed to waive off interest levied on NOC for delay in payment. NOC makes payment to IOC twice a month, on 8th and 23rd day of every month. IOC had been slapping penalty for every day in case of delay in payments.

NATTA flays CAAN's decision to distribute bonus

Nepal Association of Tour and Travel Agents (NATTA) – the umbrella association of Nepali travel agents and tour operators – has opposed the decision of Civil Aviation Authority of Nepal (CAAN) to distribute bonus to its staffers.
Issuing a statement, NATTA has said that the decision taken by former tourism minister Jeevan Bahadur Shahi was against CAAN Act 1996, Bonus Act 1973 and Bonus Rules 1982.
The decision has thrown cold water on our hope that CAAN would spend the money collected from air passengers to expand existing airports and develop infrastructure of Tribhuvan International Airport (TIA), NATTA said in its press note.
The CAAN currently collects taxes in two separate baskets. The government has authorised the CAAN to raise Rs 1,000 per passenger in airport development tax, which comes to Rs 1.70 billion annually.
In April 2013, the CAAN board authorised collection of development tax from the travellers departing from TIA to raise funds to repay its loans and finance ongoing improvement projects for a period of five years. The CAAN is authorised to spend this amount solely on development of airport infrastructure.
In addition, the CAAN collects another Rs 1,130 as passenger service charge from each international traveler, which amounts to Rs 1.80 billion a year.
However, CAAN is in the process of being split into two separate entities – service provider and regulator – which will require additional funding. It has also been upgrading Tribhuvan International Airport (TIA) by acquiring a loan of $70 million from the Asian Development Bank (ADB), despite collecting millions of rupees from passengers to develop airport infrastructure.
How can the regulator that is also under debt distribute bonus is not only legal but ethical issue, the tourism sector said. "CAAN's regulation also forbids bonus distribution, if safety is compromised."
The decision to extend bonus comes at a time when the efficiency of Nepal’s aviation sector, including its human resources, has been widely questioned at national and international forums for lack of investment and training facilities. Nepal has been put in the bad books for the worst record of air safety oversight since 2009 by the UN aviation watchdog. The European Commission has also included Nepal in its air safety list for poor safety record in 2013.
NATTA has also reminded that the European Union (EU) and International Civil Aviation Organisation (ICAO) have kept Nepali Airlines in blacklist as CAAN has not upgraded infrastructure of TIA and improved safety standards at Nepal's only international airport.
The decision has paved way for CAAN to distribute Rs 159 million to its 800 staffers. Each staff will get an average of Rs 199,062.
Meanwhile, the anti-graft body has started begin investigation on the matter.
Commission for the Investigation of Abuse of Authority (CIAA) has formally launched an investigation into the decision of CAAN to distribute bonus to its employees from money collected from passengers to develop airport infrastructure.
"We have seized necessary documents from the Tourism Ministry today over the decision to distribute bonus to CAAN employees,” said spokesperson of the CIAA Jib Raj Koirala
Though, the tourism ministry officials had recommended that distribution of bonus from money collected from taxpayers for development of airport infrastructure was not appropriate, the outgoing tourism minister Shahi had approved the decision to dole out bonuses. The tourism minister chairs the CAAN board.
The CAAN had decided to distribute Rs 530 million as bonus to its employees from profits earned during fiscal years 2011-12 to 2014-15.
Although the Bonus Act 1974 paves the way for organisations like the CAAN to distribute bonus from their profit, the Bonus Regulation 1983 forbids not-for-profit government-owned entities established to promote administrative, industrial, agriculture and other sectors from extending bonuses. The CAAN – as a regulator of the country's aviation sector – has been set up with the objective of ensuring safety, security and efficiency in the aviation sector. 

Consumer body flays decision to hike cooking gas price

Consumer rights activists today urged the government to roll back its recent decision to hike price of cooking gas. Submitting a memorandum ot the Prime Minister Puspa Kamal Dahal at his office, National Consumers Forum (NCF) has also condemned the decision to hike price of liquefied petroleum gas (LPG), popularly known as cooking gas.
The forum has demanded that the government rollback the decision immediately. "The decision has hit consumers hard as the price of cooking gas has been increased twice in the past one and half months," it said in a press note. The government fuel monopoly has jacked up the price of cooking gas by Rs 25 per cylinder on Friday citing price hike in the international market.
The country is observing the World Consumer Rights Day on February 15. And the government and various organisations working for consumer rights have announced series of programmes to mark the World Consumer Rights Day.
But on one hand, the government talks about safeguarding the rights of the consumers and on the other hand it increases price of essentials like cooking gas when the World Consumer Rights Day is just around the corner, the consumer right activists blamed.
According to president of National Consumer Forum (NCF) Prem Lal Maharjan, the government should review its decision before announcing any awareness programmes targeting the World Consumer Rights Day.
He also threatened the government that consumer rights activists would boycott all government events to mark the World Consumer Rights Day, if the Supplies Ministry does not bring down the price of cooking gas as soon as possible.
As NOC has been logging profit in recent months, the decision to increase price cannot be justified,” the memorandum to the premier reads.
The forum has also argued that the intention behind increasing price of cooking gas is to fleece consumers.
Cooking gas now costs Rs 1,375 per cylinder.
The NOC had claimed that the price of cooking gas was increased because its sole supplier – Indian Oil Corporation (IOC) – increased price of the cooking gas. "NOC will suffer loss of Rs 291.50 per cylinder even after the fresh adjustment in price," according ot the corporation.
According to the new rates forwarded by IOC, the corporation would have suffered loss of Rs 313.51 per cylinder, had it not hiked the price.
NOC, however, has kept the price of diesel, petrol and kerosene unchanged. Earlier in February also the NOC had increased the price of cooking gas by Rs 25 per cylinder, citing price hike in the international market. The NOC is logging profits in sale of petrol, kerosene and aviation turbine fuel, while it is suffering loss in diesel and cooking gas, it claimed.
The corporation however has been selling petrol at a profit of Rs 1.23 per liter in March, while it has been facing loss of Rs 4.07 per liter in diesel. NOC has also claimed that it will suffer a loss of Rs 414.4 million in March.

Central bank to float foreign employment bonds worth Rs 250 million

The central bank is floating foreign employment saving bonds worth Rs 250 million from Wednesday.
On behalf of the government, we are floating the foreign employment saving bonds to pool savings of Nepalis working abroad to finance various development projects in the country, informed the central bank
These five-year securities – which will be on sale till April 6 and allotted to investors on April 12 – guarantee a return of 10 percent per annum, and interest will be paid every six months. The yield on the bond is higher than 9 percent fixed in the last fiscal year.
The return on foreign employment saving bonds was raised to match upward revisions made by banks and financial institutions on interest of deposits, and also to attract more migrant workers investment.
These securities carry zero risk and can be used as collateral to obtain loans.
The foreign employment bonds are exclusively sold to migrant Nepali workers, Non-Resident Nepalis (NRNs) and those, who has returned to Nepal from foreign employment destinations less than four months ago.
The central bank has also appointed nine commercial banks and four remittance companies as agents to sell these bonds abroad. These sales agents have contact persons in most of the countries including Australia, Bahrain, India, Israel, Japan, Korea, Malaysia, Qatar, Saudi Arabia, the UAE, the UK and the US, where large number of Nepalis is working.
The central bank has been selling foreign employment saving bonds for almost seven years to inculcate savings habit among Nepali migrant workers and pool their resources to finance various development projects in the country, but without much success.
The central bank first floated foreign employment savings bonds in July 2010. In 2010, when these bonds were first introduced, only 0.40 per cent of these were sold. The result was even worse in the next fiscal year, when only 0.07 per cent of securities floated were subscribed. However, the demand has been gradually increasing since 2013.
In the fiscal year 2014-15, some 33.5 per cent of foreign employment bonds up for grabs were sold, while subscription rate in 2015-16 hovered around 33 per cent.
Due tolow apetite of the migrant Nepali workers, central bank senior officials have been visitng some of the countries for marketing the bonds and also create awareness among the migrant Nepali workers on how to utilise their hard earned money.
"Due to lukewarm response the central bank has sent its missions to various countries including Qatar (deputy governor Chintamani Siwakoti) and South Korea (executive director Bhisma Raj Dhungana), to sensetise the foreign employment savings bonds," according to the central bank.
Another reason, according to NRNs, for lukewarm response for the bond is regular depreciation of the Nepali currency. Nepali rupee has been weakening by over 3 per cent per year vis-a-vis US dollar for the last one decade. Those working abroad see currency depreciation as a disincentive to invest in foreign employment bonds, as they have to exchange currency of the country where they are working into Nepali rupee to buy these bonds. 

Cooking gas price up by Rs 25 per cylinder

Claiming that it is in loss on cooking gas, Nepal Oil Corporation (NOC) has increased the price of Liquefied Petroleum Gas (LPG) by Rs 25 per cylinder.
LPG – popularly known gas cooking gas – will cost Rs 1,375 per cylinder from tonight, according to NOC spokesperson Sita Ram Pokharel.
This is the second time the NOC has raised the LPG price in the last one-and-a-half months. NOC had increased LPG price by Rs 25 per cylinder on February 2 also.
In the new price list, the sole supplier of the petroleum products to NOC – Indian Oil Corporation (IOC) – has increased LPG price by Rs 122 per cylinder. "With this adjustment in price, NOC has to bear a loss of Rs 333 on the sale of each cooking gas cylinder,” he added. "But the price increment, NOC will still suffer loss of Rs 291.50 per cylinder in a month."
The fresh upward adjustment in price has been made due to price movement in the international market, he said, adding that the corporation had to increase price of LPG after IOC increased price of the popular cooking fuel. "With the revised price, the loss has come down to Rs 288.51 per cylinder."
NOC, however, has kept the price of diesel, petrol and kerosene unchanged. The state oil monopoly is logging profits in sale of petrol, kerosene and aviation turbine fuel, while it is suffering loss in diesel and cooking gas. The corporation is making profits on other petroleum products – Rs 1.23 per litre on petrol, Rs 13.05 per litre on kerosene and Rs 13.01 per litre on aviation turbine fuel – though it claims to be incurring a loss of Rs 4.07 per litre on diesel.

Cabinet decides to recover CGT from TeliaSonera

Putting an end to a long-running controversy, the government today decided to recover capital gains tax (CGT) from the seller of GSM operator Ncell.
The cabinet meeting held today evening directed the Finance Ministry to recover CGT as per the decision of the Public Accounts Committee (PAC) of May 29 and Finance Committee of June 3 from the seller of Ncell, informed minister for Law and Justice Ajay Shankar Nayak.
The decision means Swedish communication firm, TeliaSonera AB which has been claiming that it did not need to pay any tax to Nepal government, now has to pay CGT to the Nepal government.
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around $1.03 billion last April. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary, registered at Saint Kitts and Nevis – a tax haven.
The TeliaSonera AB had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region, according to the TeliaSonera.
The Swedish firm had sold a 60 per cent stake in Ncell and also dissolved its interest in an additional 20 per cent stake owned by local partner in December 2015. Ncell officially became a part of Axiata Group Bhd on April 12, 2016.
Both TeliaSonera and Axiata are public companies in their respective countries. The Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal raising lots of suspicion that the tax administration played foul by letting TeliaSonera exit the country without paying CGT to the government.
The cabinet today took the decision on the basis of directives issued by the Finance Committee and the PAC as the two parliamentary committees have been regularly asking the government to recover the CGT from the seller of Ncell. As according to the international law and domestic law, the beneficiary or the seller has to pay the CGT.
The largest transaction in Nepali corporate history has been in news – affecting Ncell’s plan to rollout 4G services – also due to some of the responsible government officials, including director general of Inland Revenue Department Chudamani Sharma, who have been saying that TeliaSonera does not need to pay CGT in Nepal. Likewise, TeliaSonera (currently Telia) has also been claiming that there is no need to pay CGT in Nepal since the transaction had taken place outside the country.
However, the house committees had been regularly directing the Large Taxpayers Office (LTO)) to fix the CGT the TeliaSonera owes to the Nepal government. Ncell is one of the largest tax payers in Nepal since last couple of years.

Government prioritises trade to achieve sustainable growth

Nepal has requested development partners to prioritise their support in four key areas – product development, trade-related infrastructure development, trade facilitation and market promotion for the trade-led sustainable and inclusive economic growth – and also gender empowerment and poverty reduction.
Addressing a concluding ceremony of 16th Donor Group meeting on Aid for Trade (AfT) here today commerce secretary Naindra Prasad Upadhayay said that the government has prioritised trade as an important component to achieve inclusive and sustainable economic growth, gender empowerment and poverty reduction through various periodic plans, policies and strategies.
Thanking Germany for its vital role as Donor Facilitator for the last five years, Upadhayay welcomed the EU Delegation to Nepal as the Enhanced Integrated Framework (EIF) Donor Facilitator. He further stressed that the Commerce Ministry was looking forward to jointly work with the European Union (EU) and relevant stakeholders, including the private sector, for address the challenges in trade sector due to limited supply capacity and inadequate trade-related infrastructure.
The meeting reviewed the implementation of the Action Matrix of Nepal Trade Integration Strategy (NTIS) 2016, the Capacity Development Strategy (CDS) of Commerce Ministry and the formal handing over the role of Enhanced Integrated Framework (EIF) Nepal Donor Facilitator from the Embassy of Germany to the European Union (EU) Delegation to Nepal.
During the meeting, various development partners working in trade sector in Nepal expressed their firm commitments in supporting implementation of NTIS 2016 and for the overall trade sector development of Nepal.
Speaking on the occasion, the out-going EIF Nepal Donor Facilitator and deputy chief of mission of German Embassy in Kathmandu Jacqueline Groth, appreciated the efforts being taken by the government on the policy front by bringing out the Trade Policy, NTIS 2016 and CDS. She also highlighted the need for support from Nepal's development partners to the government for the implementation of trade policies and strategies. She underscored the importance of coordination among various line ministries and the private sector for mainstreaming trade in sectoral polices, plans and leveraging resources.
Similarly, the new EIF Nepal Donor Facilitator and head of cooperation of the EU Delegation to Nepal Andreas Roettger, expressed the pleasure of the delegation in assuming the new role. He said that the EU was one of the largest trading partners in the world and the EU sees trade and investment also as very important vehicles for inclusive development as outlined in its 'Trade for All' strategy.
The Aid for Trade (AfT) initiative was launched during the Sixth Ministerial Conference of the World Trade Organisation (WTO) held in Hong Kong in December 2005. The major focus of the AfT initiative has been to address the supply-side constraints facing developing countries in general and the least-developed countries in particular, especially development of economic infrastructure and building productive capacity.
Least Developed Countries (LDCs) like Nepal benefit from the most preferential trade regime globally available, and Nepal has the potential to embrace this opportunity stronger. In 2016, Nepal exported goods worth 90 million euros to the EU, making it Nepal's second largest export market after India. The EU's 'Everything But Arms' initiative allows duty and quota free access for all kind of products with the exception of weapons and ammunition.
The government's Trade Policy 2015 has prioritised supply-side capacity building, increase in production and productivity, trade in services, protection and promotion of intellectual property rights, trade mainstreaming, aid for trade, and corporate social responsibility as mechanism to boost trade in the country.
In close complementarily with the policy, the government has launched Nepal Trade Integration Strategy 2016 which seeks to address the outstanding trade and competitiveness challenges confronted by the country's export sector. NTIS 2016 focuses on actions to address constraints on the seven broadly grouped cross-cutting sectors and 12 priority export potential sectors by 2020. It includes nine products – cardamom, ginger, tea, medicinal and aromatic plants, fabrics and textiles, leather, footwear, Chyangara Pashmina and Knotted Carpets – and three services – IT and Business Process Outsourcing, Tourism – and Skilled and Semi-Skilled Professional Services.
The NTIS 2016 has identified 190 actions to be implemented by 2020 with clear roles and responsibilities along with quantitative indicators to measure its success. It has clearly outlined its focus on supply capacity through increased production and productivity, product and value chain development, development of trade-related infrastructure to address the bottlenecks of supply-side constraints and enhanced market access in terms of both technical and institutional capacity building.

Government endorses Integrated Intellectual Property Policy

The cabinet meeting today endorsed the Integrated Intellectual Property Policy-2073, after its bill committee gave a nod to the policy.
The new policy intends to address all issues related to protection of intellectual property (IP) rights of people, according to industry minister Nabindra Raj Joshi. "IP rights refer to the legal rights of individuals and organisations to creations of the mind like inventions, designs, and literary and artistic works, among others."
Currently, there are separate laws for the protection of industrial intellectual property rights and copyrights. While the Ministry of Industry is responsible for industrial intellectual property issues like patent, design, trademark and geographical indications (GI), the issues related to copyright fall under the jurisdiction of the Ministry of Culture, Tourism and Civil Aviation. Due to lack of a regulatory legal framework to deal with IP-related issues, Ministry of Culture, Tourism and Civil Aviation has currently set up the Nepal Copyright Registrars’ Office to deal with copyright-related issues. Similarly, a separate dedicated section at the Industry Ministry is dealing with cases on intellectual property like patent, design, trademark, GI, among others.
As a result, the two ministries earlier had reached an agreement to set up a common regulatory mechanism for intellectual property rights.
Nepal had acceded to the World Intellectual Property Organisation (WIPO) in 2005. It compels Nepal to report to WIPO about the progress achieved based on commitments of international treaties. Due to this, the government has identified the need for a single office to deal with intellectual property rights in the new policy instead of separate institutions dealing on this issue currently.
“Endorsement of the policy not only guarantees the IP rights of people and institutions but it will also encourage investment in the country in many ways,” Joshi said, adding that Industry Ministry will also expedite process to bring an act related to Intellectual Property soon.

Energy losses drop to 17 per cent from 20 per cent

The Nepal Electricity Authority (NEA) has succeeded in slashing electricity leakage by 3.63 percentage points in the first half of the current fiscal year, resulting in savings of at least Rs 1.25 billion, according to the government power utility.
Energy loss in terms of monetary value come down to Rs 3.99 billion, based on NEA's average electricity purchase and selling price, during the review period, compared to Rs 4.02 billion in the first six months of the last fiscal year.
Both technical and non-technical loss have come down in the first six months of the current fiscal year ending mid-January compared to the corresponding period of the last fiscal year. NEA officials have attributed the decline to massive leakage control campaign organised by the power utility to end power cuts.
"Energy losses have dropped to 16.75 percent from 20.38 percent during the same period last year," said the managing director of NEA Kulman Ghising.
According to the NEA annual report, leakage had reached as high as 25.78 per cent of the total supply as of the end of the last fiscal year. The NEA was able to cut leakage following a nationwide campaign to prevent power theft and the arrest of some its errant employees.
The NEA’s new managing director Ghising moved to control energy theft and leakage after taking office in mid-September 2016.
The Energy Ministry had told Ghising to cut electricity leakage by 1 percentage point when he was given the job. Ghising in turn delegated responsibility to the regional chiefs to cut losses by the same proportion.
An analysis of energy supply, energy sold and energy losses by all eight regional offices of NEA shows that almost all regional offices have managing to bring down energy loss. The NEA’s Janakpur distribution centre was able to cut leakage to 32.61 per cent in mid-January 2017 from 52.33 per cent during the same time in the last fiscal year, according to the authority.
Likewise, the Biratnagar distribution centre’s losses came down to 16.7 per cent from 19.78 per cent during the period. The authority’s distribution centres in Hetauda, Butwal, Nepalgunj and Pokhara have also been able to cut electricity leakage, Ghising said, adding that the achievement was the result of the hard work done by the NEA staff.
According to the spokesperson of the NEA Prabal Adhikari, the NEA has stepped up efforts to control power leakage by working together with the Nepal Police to arrest employees and customers involved in stealing energy.
Police had arrested more than two dozen people including supervisors of the NEA on charges of electricity theft from different locations in the Capital couple of months ago. They were taken into custody on the charge of tampering with power meters to show less than the actual consumption in return for kickbacks.
Following the bust, the NEA transferred around 2,480 employees on suspicion of tampering with electricity meters which is expected to have caused losses running into billions of rupees to the NEA.
The entire staff at the Distribution and Consumer Services Department – which is responsible for the overall management of distribution networks and services – was transferred. Most of the transferees were meter readers and supervisors, including some senior level staff.
"Apart from controlling theft, the authority is improving the distribution system by upgrading transformers and substations to reduce leakage,” Adhikari said, adding that power leakage is due to theft and loss during transmission and distribution. "The loss during transmission and distribution accounts for 12 percentage points of the total."
The plug in of losses and increased power generation has helped the government power utility to cut the power outage hours to zero. NEA's energy supply has currently increased by 15 per cent to 2.77 billion units in the first six months of the current fiscal year, he said, informing that the NEA calculates energy supply by calculating energy consumed by its customers.
He attributed customers' overwhelming support to the utility's campaign to end load-shedding, among others, for the reduction in energy loss. "Our campaign redefined electricity theft as criminal activity," he added. "The strengthening of distribution system, and upgradation of cables and transformers also helped to bring the technical loss down."

Investors intend to pour $13.52 billion into Nepal

After the assurance from all the political parties that they are committed to protect the investment in Nepal, investors – both foreign and domestic – have shown keen interest in investing in Nepal. They signed letters of intent (LoI) for investing a total of $13.52 billion, (around Rs 1,400 billion) at the concluding ceremony of the Nepal Investment Summit 2017 today.
The intended investment amounts to more than half of the country’s GDP structure of $22.49 billion and also exceeds the budget ceiling of Rs 1,156.04 billion fixed by the National Planning Commission (NPC) for the next fiscal year 2017-18.
Amongst the interested investors, China has signed LoI worth $8.3 billion, which is more than half the total intended investment. Apart from some six foreign investors, domestic investors have also signed LoI worth $11.5 million, making for a total of 16 investing organisations.
According to industry minister Nabindra Raj Joshi, Bangladeshi investors have signed LoI worth $ 2.4 billion, whereas Japanese and UK investors showed interest in making investments worth $1 billion. Likewise, investors from Sri Lanka and India have shown keen interest in investing $ 500 million and $ 317 million, respectively, he added.
The investors have shown interest in sectors like hydropower, hotels, metro rail, airlines, tunnels, tourism, energy, agriculture, infrastructure, mines and the financial sector, amongst others, he said, adding that they have signed the LoI, which means they want to invest in various profit-generating sectors in Nepal.
However, Joshi said that in order to convert their interest into commitment, an investment-friendly environment is needed in the country and guaranteed returns from the investment. He also voiced commitment to protecting the investments.
"The summit is the beginning of glorious days ahead and the economic development of the country," he said, adding that the country is on its way to transforming itself from a Least Developed Country (LDC) to a developing country. "The investments promised will certainly help push economic growth."
 Minister Joshi requested the foreign investors to invest freely in Nepal as all Nepali politicians have committed themselves to supporting the economic development of the country. "Nepal needs stable policy no matter how unstable the political situation."
He also said that within the next decade no Nepali youth need to go to foreign countries for employment as investments will generate enough employment in the country.
Foreign investment started to flow into the country after the first Investment Summit held back in 1992, as the government then started opening up sectors for foreign investment. According to the Department of Industry (DoI), some 3,678 projects with foreign investment have been registered as of last fiscal year. The department's data also show that these projects worth investments totalling Rs 358,707.80 million in costs have generated an estimated 217,681 jobs in the country. In the 25 years since a liberal economic policy was adopted, there has been a 40-fold increase in foreign investment projects from 93 in 1990 to 3,678 in the last fiscal year, according to the department.
Of the total number of companies in the country, more than 100 as of today have transactions worth over Rs 1 billion, according to the Large Taxpayers' Office (LTO). "Some of the foreign investment companies including Ncell, Sipradi and Surya Nepal are among the large companies with transactions from Rs 10 billion to over Rs 20 billion a year, according to the LTO data.
State Minister for Industry Kanchan Chandra Bade, on the occasion, said that the government would reform all the existing policies and laws and make them business- and environment-friendly.
Likewise, chief executive officer of Investment Board of Nepal (IBN) Maha Prasad Adhikari said a number of committees had been formed to review the commitments and outcomes of the summit. "These committees will constantly follow up to materialise the outcomes of the summit and turn all investment pledges into reality,” he added.

Company (Country) – Sectors – Letter of Intent amount
Ashok Steel Industries Pvt Ltd (India) – Investment Bank, Solar, Steel Plant – $300m Plus
China Machinery Engineering Corporation (China) – Hydropower, Hospital, Kathmandu Metro (line 1 & 2) – $3bn Plus
China State Construction & Engineer Co (CSCEC) (China) – Airport, Highway, Tunnel – $2bn Plus
CTCE Group (China) – Water Suppy, Hydropower, Railways, Road, Tunnel – $1bn
Everest Chamber of Commerce & Industries (India) – Tourism – $10m
Frontier Power Ltd, London (UK) – Energy, Agriculture, Infrastructure – $1bn
Himadri Food Pvt Ltd (Pran - RFL Group) (Bangaladesh) – Food & Construction – $2.4bn
Himali Distillery Pvt Ltd (Nepal) – Pulp & Paper – $10m Plus
Medicare Environmental Management Pvt Ltd (India) – Industrial & Biomedical – $7m Plus
Radiance Renewable Technologies (Srilanka) – Hydropower, Solar, Wind – $500m Plus
RN Group of Companies (Nepal) – Constrcution & Manufacturing – $50k plus
Sichuan Baoxing Country Wonping Mining Co Ltd (China) – Mining & Minerals – $100m Plus
Sichuan Wanping Energy Science & Technology Co Ltd (China) – Hydropower, Smart Grid, Financial – $1bn Plus
Somudyak Kansai Form, Mahottari (Nepal) – Agriculture – $1m
The Kansai Electric Power Co Inc (Japan) – Hydropower (100 to 1000 MW) – $1bn Plus
Wuling Power Corporation Ltd (China) – Hydropower (Tamakoshi 3) – $1.2bn
Total – $13.52bn

World Bank giving $100m to strengthen financial sector

The World Bank has approved a $100 million credit to help Nepal accelerate its medium-term reform programme for the financial sector and to reduce the vulnerability of the banking sector and increase its transparency.
The programme focuses on reforms designed to place the financial sector on a sound foundation for the future. "The government's medium-term programme for the financial sector focuses on reforms designed to place the financial sector on a sound foundation for the future," a press note issued by the World Bank stated.
"Building on past gains, the Third Financial Sector Stability Credit will support four main policy areas: enhancing financial sector development; restructuring and consolidating the financial system; strengthening the legal and regulatory framework for crisis management, banking and insurance supervision and payment systems; and enhancing the governance and transparency of the banking sector," it added.
Despite rapid growth of banking sector, two in every three Nepalis still have little or no access to formal financial services.
“Ensuring the stability of financial system is crucial for expanding financial inclusion,” said the World Bank country manager for Nepal Takuya Kamata. "Participation in the financial system helps people start and expand businesses, manage risks and weather shocks," he said, adding that tt also promotes social protection and women's empowerment.
Similarly, the World Bank task team leader Gabi Afram said that the credit supports a sustained focus on financial sector stability to endure broader economic recovery in the aftermath of the 2015 earthquakes and trade disruption.
According to the World Bank, this Development Policy Credit, the third in a series, has been prepared in close collaboration with the International Monetary Fund (IMF) and the United Kingdom Department for International Development (DfID).  The first credit of $30 million was approved in June 2013. Similarly, the second credit of $100 million was approved in June 2015.
The credit will mature in 38 years and it has grace for six years.
"The World Bank is considering a fourth credit in this series to assist the implementation of the new legislative framework," the World Bank co-task team leader Sabin Shrestha said.
Despite the rapid growth of the banking sector, two in every three Nepalis still have little or no access to formal financial services, a statement issued by the World Bank read.

Investment climate in Nepal improving, thanks to second generation reforms

The government in recent months has passed and introduced key legislations to create investment friendly environment. And with the new legislatures that have helped create investment climate, the government is organising the Investment Summit after a long duration of 25 years. The earlier Investment summit, the government organised was in the 1992.
The government has brought a gamut of new legislations including Industrial Enterprises Act, Special Economic Zone Act, Foreign Investment and Technology Transfer Act – that is going ot be passed by the next cabinet – National Intellectual Property Policy and National Mineral Policy – approved by the cabinet on Tuesday – and the Company Act (first amendment) as part of second generation economic reform programme, according to the Industry Minister Nabindra Raj Joshi. "The amendment of Company Act has ensured easy entry, operation and exit of the companies, which has eased doing business in Nepal," Joshi claimed.
Likewise, he also said that the promulgation of Constitution and commitment of the political parties have also ensured the investment climate in the country. "On top of that Nepal has majority of youth population, which is not only hardworking but also result-oriented," he said, adding that the youth is the assests of the country for economic growth. "The country is planning to enjoy the demographic dividends by laying red carpet to the investors both domestic and foreign."
"The new laws have not only helped create investment climate in Nepal but also pushed forward the second generation of economic reforms," said Investment Board of Nepal (IBN) chief executive Maha Prasada Adhikari.
The first Investment Summit – in 1992 when the country had started the economic reforms – had sent the message to the foreign investors that Nepal was ready for investment and the second summit – starting tomorrow – will also send the message that the country has already started a second generation economic reforms and ready for investment, he added.
Adhikari also said that the board has preapred a project bank and the summit will brainstrom on eight major areas for investment including agriculture, banking and finance, energy, information and communication technology (ICT), production based sector, mines and mineral, tourism industry and transport. "The summit has prepared a project bank that would be showcased for the investors," he added.
Nepal, according to the Global Competitiveness Report 2016-17 published by World Economic Forum (WEF), is the fourth most competitive economy in South Asia as it boasts the best macroeconomic environment in South Asia, and after significant recent improvement, the second highest level of health and primary education.
However, the country is the worst performer in terms of infrastructure whcih has forced the government to invite foreign and domestic investment in the infrastructure that could also help propel the economic growth in the long run.
Second Generation Reforms
National Mineral Policy: It has set a target of bringing investment – foreign and domestic – in the domestic mineral industry worth at least Rs 100 billion in the next 10 years. The Policy envisions recognision of mineral industries as national priority industry and categorise them on the basis of their nature of production.
Likewise, it has also offered customs waiver and subsidy for infrastructural development of such mineral industries from next fiscal year 2017-18, and special customs duty waiver on import of machinery and equipment which are used for mineral exploration and production in the country. The Policy also proposes to form a National Mineral Fund worth Rs 1 billion in the budget for the next fiscal year 2017-18 to do research on available minerals and their exploration and promotion.
National Intellectual Property Policy: National Intellectual Property Policy aims at addressing existing barriers in effective implementation of Intellectual Property (IP) laws and protect and promote IP rights of people. It also envisions forming a sole and separate IP office in the country to deal with all issues related to intellectual property, instead of separate institutions.
Foreign Investment and Technology Transfer Act: The amendment of the Act – after 25 year – also aims at regulating and facilitating foreign investment in Nepal. It also envisions different tax waivers and subsidy facilities to foreign investors in Nepal.