Traders not satisfied with Monetary Policy review

Nepal Chamber of Commerce (NCC) claimed that the central bank’s first quarter review of the Monetary Policy will not help maintain fiscal stability.

The Chamber – issuing a press note today – has also concluded that the review along with the tight Monetary Policy can not address the current problems of financial sector. “The Chamber was hopeful that the quarterly review can possibly address the internal economic risks,” reads the press note, adding that the country has, though, witnessed some improvements in the external sector, the internal sector is still vulnerable.

Though the spread rate reduction by 0.4 percentage points will not push interest rate in the coming days, it has nominal chance to slash the existing interest rates, the press note further reads. The Chamber has also suggested central bank to bring down the spread to a maximum of 2 per cent.

Asking the central bank to reduce the bank rate to 5 per cent from current 8.5 per cent, the Chamber has claimed that the review will further negatively affect the industrial sector.

Private sector opposes government's ulilateral minimum wage fixation

The private sector has opposed the government's unilateral minimum wage hike, and asked not to hike the minimum wage at the time of pandemic.

Issuing a joint statement, the three private sector representing bodies said that the raised minimum wage to workers, which the government is implementing from new fiscal year, cannot be implemented as the second wave of the Covid-19 prolongs and continue to impact businesses and the economy further.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC), in the joint statement, said that more than 700,000 businesses across 54 districts across the country have been affected due to the ongoing prohibitory order. As most of them are small and medium entrepreneurs (SMEs), it will be difficult for the private sector to manage their daily expenses, they said.

"As businesses are already finding it difficult to make regular payment to workers, we cannot implement the increased minimum wage, if situation further deteriorates,” the press note reads, adding that increment of wage to workers is untimely and might also impact foreign investors and investment in Nepal.

The government has increased minimum wage of labourers from Rs 13,450 per month to Rs 15,000. It has been already published in the Nepal Gazette on May 4. 

Expressing reservations against the government's recent decision of increasing minimum salary of workers, the private sector also has asked the government not to interfere in the arrangement of fixing wages by mutual consent.

At a time, when the private sector has been unable to get any respite from the government despite announcement in fiscal and monetary policy. "In the current context, the private sector is taking all possible measures to improve the supply chain and promote economic activities as far as possible," the press note reads, adding that special emphasis should be placed on measures to keep the economy afloat and save employment. "The pandemic has affected tourism and dependent industries for more than a year and has further impacted SMEs."

At present, many tourism-related enterprises have reached a mutual agreement with their staff regarding pay in the absence of work," the press note reads, adding that increasing the minimum wage will further affect these businesses and entrepreneurs. 

Private sector calls for political stability

 The private sector called foe political stability in the country as the recent political developments have pushed the country towards the instability.

Expressing serious concern over the recent political developments in the country, they also issued a joint press note urging the political parties to take a restrained decision. “The recent developments will not benefit the country’s economy,” the three private sector associations including Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chamber of Commerce (NCC) and the Confederation of Nepalese Industries (CNI), said in the joint press note. 

Expressing their concern over current political developments, the private sector associations reiterated that the political stability can lead to policy stability, create conducive environment to set up new industries, for new businesses to flourish, jobs to be created, new investment to be attracted and the economy as a whole to be able to move forward.

The economy that is hit hard by the coronavirus, is going to be in turmoil following the political instability, they fear, adding that the consequences of the recent political developments could be even more serious. The country that has come out of political instability – after almost three decades – deserves to push for economic development instead of political wrangling, according to an entrepreneur, who claimed that the politicians have always pushed the economic agenda to the back bench, despite promising economic revolution after the country wrote the republican constitution through the Constitutional Assembly some five years ago.

Finance Minister vows to boost private sector confidence

 The private sector that has been in low morale since last 2 years, got pat on the back by the incumbent finance minister Bishnu Prasad Paudel, as he said that the government will boost the confidence of the private sector.

During a meeting with a delegation – led by Nepal Chamber of Commerce (NCC) president Rajesh Kazi Shrestha, today, the newly appointed finance minister promised that the government will support and encourage the private sector. “The economy could be revived through minimising the adversity caused by Covid-19 by supporting and encouraging the private sector,” he said, adding that the government and private sector should work hand in hand to revive the economy. “The private sector should operate their business by following the health and safety protocols also to keep the economy moving.”

Assuring the private sector that the government will implement the relief and rehabilitation programmes mentioned in the budget, he said that many problems could be solved, if the government understood the problems and difficulties of the private sector and the private sector understood the limits and role of the government.

On the occasion, Shrestha urged the government to increase purchasing power of the people to keep the economy moving and also create a conducive environment for trade and industry.

Nepal Chamber of Commerce also submitted a 22-point recommendations to finance minister. The recommendation include the revival of economy by supporting the private sector.

Private sector demands to allow businesses to operate

 The private sector today requested the government to allow businesses to operate by maintaining the safety measures prescribed by the government against Covid-19.

Representatives of three private sector organisations including Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC) – in a meeting with Prime Minister KP Sharma Oli today at his official residence Baluwatar – put forth their serious concern over the prohibitory order, after the five-month long lockdown.

The economy is going to be derailed, if the current prohibitory order is continued, they complained, adding that people are likely to suffer more from fall in their incomes than the threat of Covid-19 as a large number of people have already been laid off due to the present crisis. “People will die from hunger than from the disease as they are going jobless, due to longer closure of industries.”

Urging the government to take 33 per cent of the liability of the employees’ salary, they also asked to provide loans at 50 per cent subsidised interest rate to the small and medium enterprises. The private sector also sought an effective coordination among the three tiers of government in addressing the current situation.  

Responding to the private sector, the premier signaled that the prohibitory order – that is imposed for the third week that ends on Wednesday – will be relaxed.

FNCCI president Bhawani Rana, president in waiting Shekhar Golchha, vice president Chandra Dhakal, CNI president Satish Kumar More, immediate past president Haribhakta Sharma, vice president Bishnu Agrawal, NCC president Rajesh Kazi Shrestha, vice presidents Rajendra Malla and Deepak Malhotra represented the private sector, whereas premire was accompanied by former finance minister Dr Yuba Raj Khatiwada, central bank governor Maha Prasad Adhikari, and National Planning Commission (NPC) vice chair Dr Puspa Raj Kandel. 

Valley traders open shops after 73 days

The Valley traders today defied government lockdown orders – after 73 days – and opened their shops. The government has imposed lock down since March 24, and after extending it for eighth time has kept until June 14.
After the traders opening their shops, the chief district officers (CDOs) of Kathmandu, Lalitpur and Bhaktapur invited the traders to discuss the safety and security of the business.
The chief district officers of Kathmandu, Lalitpur and Bhaktapur after holding an emergency meeting with the traders, who boycotted the lockdown and opened their shops, said that they are positive on easing the lockdown.
The meeting discussed ways to manage the lockdown in a safe and proper way, chief district officer of Kathmandu Janak Dahal said, adding that opening businesses without safety precautions could raise the risk of coronavirus transmission and burden the health facilities.
“The local administration offices of the three cities also held talks with the traders after the emergency meeting,” he added.
Nepal Chambers of Commerce (NCC) – representing the traders – hold discussion with the three CDOs of the Kathmandu, Lalitpur and Bhaktapur. “I discussed with chief district officer of Kathmandu Janak Dahal, chief district officer of Lalitpur Narayan Prasad Bhatta, and chief district officer of Bhaktapur Humkala Pandey,” Shrestha said, after the meeting. “We have also recommended to let the businesses operate with safety and security by changing the modality of the lockdown,” he said, adding that they have offered to help businesses.
The local traders yesterday decided to open their businesses saying the lockdown is hurting their livelihood.
The president of Nepal National Traders’ Federation Naresh Katuwal said that since the lockdown has put thousands of people on the verge of losing their jobs and businesses, they decided to open their businesses from 8 to 11 in the morning by taking the necessary health and safety precautions advised by the World Health Organisation (WHO).

After huge pressure, government extends tax clearance date till June 21

The government has backtracked from its earlier decision – within 24 hour – on payment of individual and business taxes and deferred the deadline to pay taxes and submit tax details by 15 days to June 21 after a huge pressure from the private sector and the main opposition Nepali Congress (NC).
According to the new notice by the Inland Revenue Department (IRD) published today, the deadline is extended keeping in mind the nationwide lockdown and risk of coronavirus transmission. The government has imposed the lockdown till June 14 – by extending it for the eighth time since March 24 – to contain the spread of coronavirus. And the department yesterday published a notice ordering businesses and individuals to clear their tax dues by June 7 as in the normal times. The department – in the notice – asked businesses and individuals to submit the second instalment of income tax of the current fiscal year by mid-June and value added tax (VAT) and excise duty till mid-March and mid- April, respectively, by June 7. “The failure to meet the deadline for filing tax returns and clearing tax dues of previous months will result in charges,” the notice read.
But the notice only infuriated private sector, citizens and main opposition party. The main opposition party Nepal Congress – issuing a press note signed by party president Sher Bahadur Deuba – has urged the people to gently disobey the government diktat to clear tax by June 7, as the country is still under lockdown since last 72 days bleeding the economy. Nepali Congress alleged that the government has been terrorising private businesses, labourers, and farmers with tax compliance instead of introducing a special relief package to them.
The businesses have remained shut for almost two-and-a-half months since March 24, and the movement has been curtailed by the government, which is forcing the people to pay tax by June 7 within lockdown period, said an angry entrepreneur. The lockdown has been imposed till June 14.
After the criticism from different sectors of the society, the department in its new notice today said that the deadline to submit tax details, income details and payment of taxes has been extended to June 21. The department has extended the deadline to pay value added tax, excise duty, tax deducted at source (TDS) under income tax, education service tax, telephone ownership fee, and telecommunication service fee to June 21 from the previous deadline of June 7, according to a notice issued today by the department.
According to the revised decision, businesses and individuals are now required to submit the second installment of income tax of the current fiscal year by June 29, the new notice reads, adding that VAT and excise duty need to be submitted by June 21.
This is the third time that the government has extended the deadline to pay taxes as the country continues to remain in lockdown to prevent the spread of Covid-19, which has claimed nine lives and infected over 2,300 people across the country till date.
The infuriated private sector representatives – including Federation of Nepalese Chambers of Commerce Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chambers of Commerce (NCC) – has criticised the government decision for exerting undue pressure on the private sector to clear taxes despite the continuation of lockdown.
The deadline extension followed a request from the private sector representatives to the finance secretary Shishir Kumar Dhungana during a meeting with Finance Ministry officials today morning. “The government decision to extend the deadline is a move towards a positive direction,” senior vice-president of the FNCCI Shekhar Golchha said, adding that the private sector has asked that the deadline be extended till the end of current fiscal year, until mid-July. “Most of the businesses are not in a position to pay taxes immediately as there is still a lack of cash flow due to the fact that the markets are closed.”
The VAT and excise duty are taxes that the business people have collected in the market but they have already been spent. “So, they need to raise cash from the market to pay the tax authority,” he added.
The government, on the other hand, is under pressure to mobilise revenue as the government coffer is almost empty, and from the beginning of the new fiscal year 2020-21, the government may not be able to pay salary to government staff due to huge deficit in revenue mobilisation because of its failure in collecting taxes.
According to the Finance Ministry, the government has only collected Rs 657 billion so far, against a target of Rs 967 billion by mid-June. “Though Dr Yuba Raj Khatiwada is the second lucky finance minister to present three budgets in a row – after 1990 – he has failed, for the second consecutive years, to mobilise the revenue and also spend budget,” sources at the Finance Ministry claimed that the stronger government – in the history of Nepal – led by KP Oli has failed to create business friendly environment and promoted ‘some businessmen’ for the benefit of the party. “The stable, stronger and powerful communist government is promoting crony-socialism rather than taking care of people, which has resulted in the revenue deficit since last two fiscal years after Khatiwada took charge of the Finance Ministry.”

Stay advanced with innovative technology at Nepal 5P

5P is the only dedicated industry specific international trade show for Plastics, Paper, Printing, Packaging and Processing Industries in Nepal. “It promises to be an excellent platform to forge business alliances, showcase innovative technologies and interact directly with the traders from across the country,” according to the organisers.
“Comprising of five industry-focused phenomenal trade fair shimmering with unprecedented export opportunities and unveiling brand-new formats and cross-industry concepts and technologies to a dynamic rapidly growing business environment,” said Media Space Solutions, Nepal and Futurex Trade Fair and Events (India), the organisers.
Nepal is one of the fastest growing markets in SAARC Countries and this exhibition would attract thousands of buyers and decision makers from all levels and segments of Plastic, Paper, Printing, Packaging & Processing Industries and aims to promote a direct business link between buyers and sellers, they said, adding that Nepal 5P Expo is supported by PHD Chamber of Commerce (India), Nepal Chamber of Commerce (NCC), Corrugated Boxes Manufacturers Association of Nepal, Screen Printing Association of India, All India Plastics Industries Association and IPAMA. “Being India the biggest supplier of machinery and raw materials in Nepal, more than 100+ Indian companies are exhibiting together with participants from China, Taiwan, Germany, Italy and more than 50+ companies are exhibiting from Nepal in this expo.”
With more than 120 global exhibitors, the expo takes great pride to have developed into an international event, targeting not just the neighboring countries but also attracting the interests of visitors from Europe, Africa and other Asian countries with the year’s theme ‘Building Nepal together for a brighter tomorrow’ leading the way.
The expo will witness all kinds of manufacturers of plastic processing machineries, screen printing, containers, bib cock, injection moldings machines and printing machines, tapes, plastic heaters office stationery machineries, printing spare parts, paper machinery, paper cup machineries, all kind of papers, and spare parts, makers of sewing machines, packaging machinery, wrap film manufacturers, label manufacturers, corrugated box manufacturers, and many more on display.
“Nepal 5P not just provides a great opportunity and a platform for suppliers, manufacturers and buyers to meet and share notes, but also claims to be a catalyst in the development drive of future Nepal and the flow of cutting-edge technology and best practices,” the organisers added. “While every segment of the Printing, Plastic, Paper, Packaging and Processing industry is represented in the expo, the participation of top brands assures a feature-packed event.” 

Private sector criticises government for imposing heavy tax

The private sector today criticised the government for imposing heavy taxes.
Speaking at a programme organised to mark the 8th National Tax Day, they also said that the privaye sector has not been able to meet basic expenditures due to heavy taxes imposed on them.
Senior vice president of Federation of Nepalese Chamber of Commerce and Industries (FNCCI) Shekhar Golcha and president of Nepal Chamber of Commerce (NCC) Rajesh Kaji Shrestha complained the government for collecting heavy taxes putting burden on private sector.
Golchha, on the occasion, criticised the government for making the PAN card mandatory for all wage earners. “It has severely affected businesses of small entrepreneurs," he said, vowing to support the government in its bid to expand the base of the taxes. “We are ready to support the government in its campaign of achieving economic goals.”
Likewise, NCC president Shrestha urged the government to give relief to the industrialists and entrepreneurs by exempting unnecessary taxes on them.
Meanwhile, finance minister Dr Yuba Raj Khatiwada, on the occasion, said that the government is committed to creating a conducive environment for the private sector although industrialists are facing some challenges due to tax in the new federal set-up. He said that the government has introduced a new tax system to make the industrialists and entrepreneurs more responsible.
The finance minister said the government was making needful preparations to mobilise three-fourths of total taxes from internal sources. “The government is committed at increasing the share of internal resources even though it may be hard in the beginning,” he said, adding that  the government will make amendment to tax policy and law. “The economy is in a transitional phase and the business fraternity will be used to be with VCTS, PAN, and other ICT systems soon.”

Harvard Alumni demand immediate release of Dr Roop Jyoti

Harvard University alumni today asked the government to immediately release Dr Roop Jyoti and his family members from imprisonment.
Dr Jyoti was arrested from Tribhuwan International Airport (TIA) upon his return from Singapore on November 7. “Independent press reports suggest that Dr Roop Jyoti was charged for a crime he was not involved in," reads a press note released by Nepali students and alumni members of Harvard University. "A multi-year and multi-party business dispute that should and could have been settled via a mediation or arbitration process appears to have been blown out of proportion into a criminal offence - targeting Dr Roop Jyoti and resulting in his arrest," the press note reads, adding that they are troubled by media reports, which suggest that Dr Jyoti is being harassed because he refused to succumb to extortion.
“We demand that the authorities investigate this charge,” reads the press note signed by more than two dozen Nepal students from Harvard University and alumni members.
Expressing their hopes that the rule of law will prevail, the alumni members, said, "While we expect the rule of law to prevail and to take its course, the circumstances and the manner in which Dr Jyoti and his family are being treated appear to be arbitrary, disproportionate and unfair.”
The alumni members also strongly urged the government to free Dr Jyoti and his family members. “As not doing so would send an adverse signal that the authorities in Nepal can arrest anyone under any pretext, thereby ruining the person’s reputation, damaging the worth of their societal contributions, and casting a chill in the way that civil society and the private sector operate with rights and privileges granted by the Constitution of Nepal," the press note further reads.
Renowned businessman, philanthropist and Vipassana meditation teacher, Dr Roop Jyoti, who completed his PHD from the prestigious Harvard University in 1999, is currently under police custody due to a case filed by Bigendra Krishna Malla against him.
However, Malla yesterday took his case back saying that he does not want to move to Court. The Police might release Dr Jyoti tomorrow. But the surprise arrest of Dr Jyoti – under the charge of fraud that is not criminal offence – has raised eyebrows of all quarters. The unlikely fast move of Nepal's police and the ‘suspected involvement’ of government in the case has also sent a negative message to the investors, domestic and foreign. The 'treatment' to the eight-decade old Jyoti Group has also terrorised the private sector. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chambers of Commerce (NCC), Nada Automobiles Association of Nepal, Nepal-China Chambers, National Business Initiative (NBI) and various business institutions have also issued the press note protesting against the government move to defame a reputed business group and Dr Roop Jyoti.
The private sector also held a rally protesting the arrest of Dr Roop Jyoti and his daughter today.
Meanwhile, Bigendra Krishna Malla – who had petitioned a case of fraud against former state minister and renowned industrialist Dr Roop Jyoti – has filed an application requesting withdrawal of case in the Office of the Attorney General (OAG) today in Kathmandu, informed assistant district attorney Num Raj Khanal. The decision of OAG to not move the Court – as also suspected to be out of the court settlement – will help police to free Dr Jyoti.
According to the First Information Report (FIR) filed by Malla alleging Dr Jyoti for defrauding Rs 12 million, the police had arrested Dr Jyoti and his daughter Suruchi Jyoti last Thursday. The Kathmandu District Court had already extended remand on the father-daughter duo two times, for further investigation. The eight-day remand is to end today, while the petitioner filed for withdrawal of the case yesterday. The police has, however, already submitted the investigation report to the Office of Attorney General (OAG), while the case is in process.

Industrialists to hit street against arrest of Jyoti Group members

The Nepal Inc is taking to street against the arrest of industrialist and vice chairman of Jyoti Group Dr Roop Jyoti and the arrest warrant issued against industrialist and chair of the Jyoti Group Padma Jyoti.
Issuing a press note today, various commodity associations and district chambers, said that they have started protests across the country against the highhandedness of the government machinery and assault on private sector.
The intimidation of some people backed with the government machinery is a serious threat to the development of the private sector under the two-third majority stable and strongest government in Nepal’s history, a former president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) said, adding that the Nepal Inc has lost confidence on the government as it has been misled by some crook people.
The member organisations under FNCCI – including Nepal Automobile Dealers’ Association (NADA), Federation of Contractors’ Associations of Nepal (FCAN), Kathmandu Chamber of Commerce and Industry and Dairy Association of Nepal – have launched protests against the arrest of Dr Roop Jyoti and arrest warrant against Padma Jyoti, who is not only the former president of FNCCI but also a fair businessman compared to others.
Citing that such high-handedness against entrepreneurs is creating havoc in the business community and terrorising them, the private sector representatives asked the Prime Minister to interfere and ensure the business confidence.
While police arrested Dr Roop Jyoti last week from the Tribhuvan International Airport (TIA) on charges related to housing fraud, the Kathmandu District Court issued an arrest warrant against Padma Jyoti on the same case.
“The arrest of members of Jyoti Group has terrorised the entire private sector,” senior vice-president of FNCCI Shekhar Golchha said, adding that such activities will affect the business environment and discourage investment in the long run.
Earlier, Bigendra Krishna Malla had filed a case against Dr Roop Jyoti and entire Jyoti Group complaining that he had paid Rs 27.6 million in installments since September 2014 for a house at Bansbari in Budanilkantha to Landmark Developers, in which Jyoti Group has a stake but he still has to get possession of the house.

Tariffs on half a dozen goods revised again after first quarter

The government has revised customs and excise duty on more than half a dozen goods – including gold, silver, cosmetic products, cleaning materials made of iron and steel, and coffee related products, hatching eggs, acrylic emulsion – after the end of first quarter of the current fiscal year 2019-20 to promote the domestic products and discourage the imports.
Though, the government argued that customs and excise duty was revised as per the need mentioned in Sub-section (1) of Section 18, Financial Act, 2019, private sector has expressed dissatisfaction over the revision of customs and excise duty within three months of the implementation of Financial Act 2019. “It will affect stability of trade,” reads a press note issued by Nepal Chamber of Commerce (NCC) today. The chamber reminded government that industries and trading firms do businesses on the basis of their commercial plan prepared according to the Financial Act made public at the beginning of the fiscal year. “But the change in three months will create policy instability making it difficult for the businesses to operate,” it reads.
The cabinet meeting – on November 4 – has decided to revise the customs tariff on gold, silver, wine and coffee related products. The government has increased customs duty on gold imported for commercial purpose by Rs 1,500 per 10 grams on top. Likewise, the government – through the budget speech for the fiscal year 2019-20 – had increased customs duty on gold to Rs 5,000 per 10 grams. With the fresh revision, customs duty on the precious yellow metal has reached Rs 6,500 per 10 grams.
Likewise, tariff on silver has also been increased to Rs 75 per 10 grams, up from Rs 56 per 10 grams.
“The migrant workers bringing in up to 50 grams of gold are now required to pay Rs 7,500 per 10 grams, which was Rs 6,200 per 10 grams before the revision,” according to the notice published in the National Gazette. “If such workers bring 50 grams or more gold, they will have to pay Rs 8,500 per 10 grams as customs duty.” Such tariff was Rs 7,200 per 10 grams before.
The Gazette reads that customs duty of Rs 8,500 per 10 grams will be levied on gold ornaments of up to 50 grams. Earlier, customs tariff on such imports was Rs 7,200 per 10 grams. Likewise, customs duty on import of gold ornaments above 50 grams has been set at Rs 10,000 per 10 grams from Rs 9,000 per 10 grams, the Gazette reads.
Likewise, the government has also increased excise duty on cosmetic products to 10 per cent from 5 per cent. It has also decided to impose excise duty of 5 per cent and 10 per cent on cleaning materials made of iron and steel, and coffee related products, according to National Gazette.
The government has, however, relaxed customs tariff on goods like hatching eggs, acrylic emulsion and excise duty on wine produced in Nepal to promote the domestic products. The government has reduced customs duty on hatching eggs by half. Similarly, customs duty on import of acrylic emulsion – raw material for paints – has been reduced to 20 per cent from 30 per cent to promote the domestic production. The government has also lowered excise duty on wines – wines having up 12 per cent alcohol – made using locally produced fruits by 30 per cent.

Arrest of Dr Jyoti terrorises Nepal Inc

The arrest of Dr Roop Jyoti has terrorised the private sector.
The private sector – that has been hoping for growing economic activites due to two-third majority stable government – slammed the decision to arrest industrialist Dr Roop Jyoti stating that the move has not only eroded the confidence of the business community but also sent a chilling signal that the state machinery could be misused to intimidate the private sector.
The Kathmandu District Court had granted the police permission to arrest him on Tuesday. Dr Roop Jyoti – the vice chairman of Jyoti Group – has been arrested Thursday evening while he was returing from Singapore by Silk Air.
“The government move will certainly deteriorate the confidence of the business fraternity,” according to president of Nepal Chamber of Commerce (NCC) Dr Rajesh Kaji Shrestha. “Neither will it send a positive message,” he said, adding that the authority will have adopted an alternative measure instead of arresting a reputed industrialist like a criminal.
Dr Roop Jyoti is also a brother of Padma Jyoti, who is the former president of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI). Jyoti Group is considered a business house that believes and acts on fair and ethical business.
The private sector organisations – FNCCI and NCC – denounced the arrest of Dr Roop Jyoti. Issuing a press note yesterday, the FNCCI said that its attention has been drawn toward the arrest of Dr Jyoti from the airport while returning home, and his condition under the detention.
Warning that such highhandedness against industrialists and businesspersons in the country can make an adverse impact on the environment for domestic and foreign investment, the private sector asked the state agencies to treat businesspeople with respect in line with the concept of rule of law.
Earlier, the court has permitted the arrest warrant against him on charge of cheating Rs 13.6 million in a land transaction case filed by Bigendra Krishna Malla. Malla, who claims he paid Rs 12.60 million for a house in Kathmandu-3 at Bansbari, said he was neither given a house nor refunded money.
The Metropolitan Police Range, Kathmandu, had arrested Dr Roop Jyoti and his daughter Suruchi on Thursday evening and remanded the duo on Friday to police custody for three days.
The private sector sees an ‘invisible hand’ in issuing arrest warrant against the family members. “With the political backing, somebody is playing foul to tarnish the dignity of established entrepreneurs,” the private sector said, adding that Dr Roop Jyoti has neither received the money nor promised to provide a house. Landmark Developers – where CE Construction and Jyoti Group owns stake – has sold the land, where the developer was supposed to construct the house. But the devastating earth quake in 2015 has delayed the construction.
As managing director of CE Construction Sambhu Phuyal had made the deal and received the installment money without receiving retaining right from Jyoti Group. Phuyal had received the money from Malla on April 6, 2016 to construct a residential building on a land plot developed by Landmark Developers Pvt Ltd. After failing to hand over the committed property on time, the money was returned to Malla on December 1, 2018 – three days before Malla filed cased at the Kathmandu District Court – which he refused to take. But since Malla did not accept the money back that he paid in installments, Dr Roop Jyoti deposited the money at the court. However, the power play made the case complicated as Malla went to power centres and used state machinery to out Dr Roop Jyoti behind the bars.
Phuyal had also admitted before the High Court that he had received the money without taking the authority from the concerned party. Malla claimed that Dr Roop Jyoti should provide him either a house – as promised by the Landmark Developers – or pay Rs 40 million.
Meanwhile, demanding his immediate release, a group of business people staged a silent demonstration at Maitighar Mandala in Kathmandu to protest against the arrest of Dr Roop Jyoti.

Industrialist Dr Roop Jyoti remanded for five days

The Kathmandu District Court has today further remanded industrialist Dr Roop Jyoti to five-day police custody.
Earlier on Friday, court had allowed police to investigate him by keeping him in custody for three days which ended today. Metropolitan Police Range Kathmandu had detained Jyoti on Friday, shortly after he returned from Singapore by Silk Air on charge of his alleged involvement in a housing procurement scam.
Dr Jyoti himself pleaded on his behalf during today’s hearing on whether or not to extend his remand. He claimed that he is not going to run away neither has any intention of it as he has returned the country. Denying his involvement in any wrongdoing, Dr Jyoti asked the court to let him fight the case remaining out of the police custody. Dr Jyoti, who is also a former state minister for finance and vice chairman of Jyoti Group, is primarily charged of duping people in housing business last December. The police had also issued an arrest warrant against him on complaints that he was involved in housing fraud worth millions of rupees. But Dr Jyoti had immediately filed a writ against the arrest warrant and obtained a stay order from the court. However, a double bench of Chief Justice Cholendra Sumsher Rana and Justice Prakash Dhungana had vacated the stay order on Jyoti’s case on Tuesday paving the way for police to arrest him.
But the private sector has condemned the arrest of Dr Jyoti. Arresting industrialists in such a manner will discourage the business community and negatively impact the business environment of the country,” they said, adding that such intimidation using the state mechanism is alarm bell for the private sector that is hoping to build the confidence after the formation of the two-third majority stable government.
Likewise, a group of business people also staged silent protest against Dr Jyoti’s arrest in Maitighar today. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Chmabers of Commerce (NCC) and Confederation of Nepalese Industries (CNI), alongwith many other business organisations issued press note expressing deep concern over Dr Jyoti’s arrest.
“Arresting an industrialist, who has a reputed history of doing business in the country and helping the entire economy by giving employment opportunities to thousands without enough investigations will certainly discourage the private sector,” the FNCCI press note reads, adding that such trend of arresting industrialists will discourage both domestic and foreign investment in the country. “The government agencies must treat the country’s private sector with dignity and respect.”

Business opportunities between Nepal and Romania discussed

Nepali and Romanian business people today discussed in searching the business possibilities and also to develop bilateral relationship between business persons from the two countries.
A total 11 business persons including the president of Chamber of Commerce IASI Romania, which is the second largest city of Romania, and different business organisation’s representatives with youth, entrepreneurs and business persons from Nepal also took part in the ‘Bilateral Business Opportunities between Nepal and Romania’ organised here today.
The programme – chaired and moderated by chairman of organising company Technovation Future Care Pvt Ltd Prakash Ghimire – also witnessed consulate general of Romania Narayan Bajaj, vice president of Nepal Chamber of Commerce (NCC) Naresh Shrestha, senior manager of Nepal Tourism Board (NTB) Sunil Sharma, entrepreneur and JCI Nepal past president Senetor Raju KC, entrepreneur and coordinator of Romanian delegate Marius Alexa, president of Chamber of Commerce IASI Paul Butnariu.
On the occasion, 5 entrepreneurs and business persons from Romania presented their business presentations.
Likewise, consulate general of Romania Narayan Bajaj, on the occasion, said that he had just started his role as honorary general consulate since the month of May. He has also committed to enhance the relationship between two countries. “We will also prioritise in promoting Visit Nepal 2020 (VNY2020) and request to promote visit Nepal 2020 in Romania,” he said, emphasising that Nepal has good time for economic growth and to become a developing countries because now Nepal has political stability with the two-third majority government.
Nepal Chambers of Commerce (NCC) vice president Naresh Shrestha, on the occasion, said that Nepal is not a poor country. “Nepalis have high purchasing capacity,” he said, inviting the Romanian entrepreneurs to invest in Nepal.
On the occasion, the past National president of Nepal Jaycees Raju KC presented his presentation on ‘Foreign Investment in Nepal’. “Investment in Nepal can be highly profitable and two largest populated countries India and China also will be the possible sales market from Nepal,” he added.
Presenting economic profile of IASI city, the president of IASI chamber of commerce, Paul Butnariu said that they have so many business opportunities as well as investment plan in Nepal. “We want to take skilled and non skilled manpower in the field of hospitality management, construction, information technology, food production and services and students for higher education in so many universities and colleges,” he said, adding that they are ready to promote Nepali tourism in Romania and invite Nepali delegates to visit Romania very soon.
During the programme, Romanian entrepreneurs and business persons presented their products and services from HR consultancy, management and education consultancy, food industry and services, IT, modern printing solution, travel/tourism management, healthcare and beauty products.
The Romanian delegates are now in Nepal from September 22 to October 1. Apart from Kathmandu, they will also visit Bhaktapur, Gorkha, Pokhara, Lumbini and Chiwan.
The Technovation Future Care Pvt Ltd of Nepal and SC Arhipelago Interactive SLR of Romania have already signed a memorandum of understanding (MoU) to promote bilateral visits and to develop business relationship.
In the near future, Nepali delegates will also be visiting Romania.

Government mulls introducing inheritance tax

The government is considering introducing inheritance or estate tax to widen parameter of revenues on wealth.
Speaking at an interaction on ‘Contemporary prospects and challenges of Nepali economy’ organised by Nepal Chamber of Commerce (NCC) in the capital today, finance minister Dr Yuba Raj Khatiwada said that the Finance Ministry is exploring various options for inheritance tax although it has not yet reached a decision.
The ministry is currently discussing on the modality of inheritance tax, he said, adding that the issue will be tabled at the to-be-formed Revenue Board, though the ministry is planning an extensive discussions before introducing such tax.
Though, inheritance tax is common in the developed countries, it could flare a negative debate in Nepal as according to culture, the children naturally inherit their parents property after death. The inheritance tax is levied on property inherited from person who has died. The inheritance tax rates are determined on the basis of various factors including the condition of the residence, property, total worth of the inheritance, and the beneficiary's relationship to the deceased. Several countries across the world including Britain and Japan have such tax. The tax is either imposed as duty on the estate of a deceased or as an inheritance tax on the inheritor.
Though, Dr Khatiwada didn't go into the details, inheritance tax could be one of the perfect tools to check corruption and red tape in the country. But the proposal for inheritance tax as it has been proposed at a time when the three tiers of government are being criticised for creating 'tax terror' to meet their resource needs, has sent negative message to the business and industry fraternity.
On one hand the government officials and political leaders are being blamed for misuse of government funds and tax paid by the citizen in luxury vehicles, foreign junkets and paying perks to people's representatives, on the other additional tax, in the name of inheritance, is not going to please the citizens.
After the country is federated into three tiers of government, they are under tremendous pressure to manage funds for their operations. The local and provincial governments have lately been imposing taxes arbitrarily to meet their funds needs.
Dr Khatiwada, on the occasion, also said that the government will not excuse traders and businesses that are found to be evading taxes. “The private sector undoubtedly is the major force to drive the economy and the intention of the government is to facilitate businesses, not to trouble them but businesses should abide by the legal framework,” he said, urging the traders to come and have discussions with the government regarding their concerns or any change in policies that is hampering business growth.
The minister also reminded the traders that the government is tightening imports to give a boost to domestic production and encourage exports.
Regarding the government’s recent move of implementation of permanent account number (PAN) and vehicle and consignment tracking system (VCTS), Dr Khatiwada said that their implementation will prove to be a boon for the economy in the long run.
But the NCC president Dr Rajesh Kazi Shrestha, on the occasion, said that the government should hold enough consultations with the private sector before introducing such business-related policies.

Certificate of Origin to be issued online

Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chamber of Commerce (NCC) will be issuing Certificates of Origin (CoO) through online.
The NCC today organised a soft launch of the online system, whereas the FNCCI and CNI have already launched the system to make it easier for the exporters. CoO is necessary for the exporters to certify that the exportable products are originated from Nepal.
“Earlier, the traders had to wait for the office hours to issue the certificate,” NCC president Rajesh Kaji Shrestha said, adding that with the beginning of online system, the process can be completed within few hours during any time of the day.
“Though the online is yet to be integrated with payment mechanism, it will be collaborating with digital payment platforms like e-Sewa and Khalti soon,” according to Computer Association of Nepal (CAN) that has developed the online system of CoO for the FNCCI, CNI, and NCC. “The traders have to pay through banks and attach the voucher with the certificate for the time being.”
The private sector has hired staff to help traders with the system and the Ministry of Industry, Commerce and Supplies has also given them a month to get used to with the system. “From mid-August, using an online system will be mandatory to issue CoO, according to the ministry.
The system will also help the Department of Customs, Department of Industries, and central bank in checking the details on exports and transactions, Shrestha added, on the occasion.
According to the Ministry of Industry, Commerce and Supplies, the online system is a good step towards making paperless trade, and reduce hassles with no human face involved.
The Department of Customs – implementing a single-window system to facilitation trade and create business-friendly environment – has been integrating business processes with technology. The department has already been linked with 15 agencies in this integration process, and Vehicle Tracking Consignment System (VCTS) is one of its initiatives. The VCTS has been recently introduced as a trial for three months.

Government plans joint-venture bank to facilitate Nepal-China trade

The government is planning to set up a Nepali-China joint-venture (JV) bank to facilitate the trade between the two countries through banking facility.
Addressing the traders at an interaction – organised by Nepal Chamber of Commerce (NCC) here today – finance secretary Rajan Khanal said that the government is holding talks with the Chinese authorities to establish a JV financial institution to facilitate trade with the China through the banking system. “Establishment of a JV bank will make the Letter of Credit (LC) opening easy that will help formalise the trade,” he said, adding that a Chinese bank is likely to come to Nepal soon. “There is also a probability to create a JV with a government-owned bank.”
The private sector is also trying to bring a Chinese bank in Nepal to facilitate the trade with the northern neighbour since long. But they have not been successful in bringing any of them due to lack of suitable partner. “The traders are using Telex Transfer (TT) also known as wire transfer or draft to make the payment to the Chinese traders,” Khanal said, adding that the LC is an instruction from the importers to a bank in a foreign country to pay the money to the exporters when the required conditions are met while TT is the transfer of money from one bank account to another through electronic means.
The trade between Nepal and China is increasing in recent years. Nepal imported goods worth Rs 186.6 billion in the first 11 months of the current fiscal year 2018-19 from China, while it has exported goods worth Rs 1.96 billion to the northern neighbour.
Khanal, on the occasion, also said that the government is serious about addressing the grievances of the private sector. “The government is trying to create investment friendly environment with better incentives and tax waiver policies,” he said, asking the traders, however, to not run the businesses on tax incentives. “As Nepal is the members of the World Trade Organisation (WTO) and South Asia Free Trade Area (SAFTA), duties on import of foreign goods will go down gradually so you have to develop competitiveness.”
Likewise, revenue secretary Lal Shankar Ghimire, on the occasion, said that the government is planning to establish a Revenue Board in the first month in the next fiscal year.
The government has promised to establish a permanent Revenue Board since long. “It will come into existence from the beginning of the next fiscal year,” he said, adding that the government wants to have an intensive discussion with the private sector to make the board more effective, as the government wants to facilitate the business environment, “The Finance Ministry is developing a home delivery system for the Permanent Account Number (PAN) cards, which would be implemented soon.”
Ghimire also informed that the government is trying to protect the domestic products that have potential to make the country self-reliant. “The protection could sometimes be harmful for the consumers as the consumers have less choice, and the government also losses revenue but protection measures are being applied to let the domestic business grow and reduce the whopping trade deficit based on rising imports.”
President of the NCC Rajesh Kazi Shrestha, on the occasion, demanded the government not to promote industries that import raw materials. 

Private sector asks to lower corporate tax

The private sector has asked the government to reduce corporate income tax by five per cent, give 50 per cent waiver on tax levied by local governments on land and housing registration, especially for those meant for industry and hotel business. They also want excise duty scrapped on all merchandise, except tobacco and liquor.
During a meeting with the finance minister Dr Yuba raj Khatiwada – a week before the announcement of budget for fiscal year 2019-20 – today the private sector reminded the government that it has failed to fully implement past budgets. “In this context, the incumbent strong government should bring a budget that ensures implementable budgetary programmes and policies.”
“The country has historically failed to execute budgetary programmes and policies,” president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Bhawani Rana said, adding that the budget for the next fiscal year should focus on it.
Submitting a joint recommendation – for the first time – to finance minister Khatiwada, the FNCCI, Confederation of Nepalese Industries (CNI) and Nepal Chamber of Commerce (NCC) urged for the measures to be adopted in banking, industrial, financial, tax administration, tourism and agriculture sectors to encourage business.
“The government should introduce effective project monitoring and policy implementation mechanism through the budget,” CNI president Satish Kumar More said, adding that the private sector expects policies and programmes that will accelerate business growth and overall development. “But it is crucial to focus on implementation.”
The private sector has also urged the government to simplify tax rules and ensure businesses do not face the problem of double taxation. Seeking policy intervention to stabilise bank interest rate, they asked the finance minister to focus on addressing the problem of credit crunch in the market. “The government should boost development expenditure and improve credit flow in the banking sector.”

NCC withdraws membership from FNCCI

Nepal Chamber of Commerce (NCC) has decided to withdraw its membership from the Federation of Nepalese Chambers of Commerce and Industries (FNCCI). NCC sent a membership withdrawal notice to FNCCI today, ending the five-decade long relationship between the two organisations.
Confirming the separation, president of the NCC Dr Rajesh Kazi Shrestha said that chamber has decided to withdraw membership from the FNCCI as it is expanding its own organisation in line with the new federal structure.
NCC is the founding institutional member of the apex body of the nepali private sector, FNCCI. The FNCCI is present across the country and has the largest network second to the government.
Both the private sector institutions separating and expanding their own network on their own has drawn mixed reaction. Some claim that having more nationwide network of private sector will streghten the private sector, whereas others claim that it will weaken the private sector. "Both the institutions will advocate and lobby for the private sector,” Shrestha said, adding that they can also jointly work in many issues.
NCC – established in 1952 – is the oldest private sector organisation and has more than 1,600 ordinary members and more than 8,000 registered firms, whereas FNCCI was established by the NCC as its founder associated member in 1965. Currently, FNCCI – the the umbrella organisation – has 105 district-and municipality-level chambers in 77 districts; 100 commodity and sectoral associations; 880 leading public and private sector undertakings, and 20 bi-national chambers.
The separation is – according to some private sector leaders – mainly due to ‘ego tussle’ of leaders of the two organisations. "We have been witnessing the ego tussel among some of the leaders of the two organisations since some time," said an industry captain, without wanting to be named. "The differences bubbling under the surface have been exposed as NCC formally withdrew its membership from the FNCCI yesterday," he said, adding that the annual general meeting of NCC in January had decided to transform NCC into a federation, raising the eyebrows of top guns in the FNCCI. "The FNCCI has sought clarification – from NCC asking why the federation should not scrap its membership – which has also flared the ego tussel," said another industry leader, seeking anonymity.