Thursday, May 3, 2018

Budget to safeguard domestic production

The government is planning to promote local industry by introducing 'import restriction mechanism' in the budget for the next fiscal year 2018-19.
Addressing a pre-budget interaction organised by the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) today revenue secretary Shishir Kumar Dhungana said that the government would impose tariff and non-tariff measures like quantitative restriction on the imports of goods that are affecting domestic products. "We are introducing import rationalisation mechanism through the budget,” he added.
The government will – according to the Constitution – announce budget for the next fiscal year on May 29.
"The budget will also review the export incentives,” Dhungana said, adding that the exports incentives could not help increase exports. "The budget is planning income tax refund instead of export incentives."
Despite export incentives, the exports have not seen encouraging growth, he added.
The government at present provides up to 4 per cent of cash incentives in export items based on the value addition to these products. "The budget could implement the provision of providing cash incentives based on the income tax paid by the exporters,” Dhungana informed.
According to the Finance Ministry, a number of firms have been billing woolen carpet for export at just Rs 25 per square metre while yarsagumba export price is a mere Rs 5,000 per kg. The revenue administration has been blaming traders for avoiding payment of income tax as ato Dhungana, the government this year has collected only Rs150 million from the export sector.
However, the private sector asked the government to implement multiple VAT system, increase the rate of cash incentives on exportable goods, revise the reference price system at customs points and also revise the import duty on import of raw materials. The current duty has also been discouraging the industries in the country and encouraging imports of the finished goods as the duty on raw materials is higher than the finished goods.
Dhungana, on the occasion, also showed serious concern – as always – for under invoicing also.
President of Yarn Manufacturer’s Association Pawan Golyan, on the occasion, said that a large volume of substandard yarn is being imported through under invoicing. "In addition, such goods are getting up to 35 per cent exemption in customs duty whereas the raw materials used for making yarn get only up to five per cent of the exemption,” he added.


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