Nepal should adopt a two-pronged strategy to boost trade in agriculture products, according to experts.
The country should work for the removal of the remaining market barriers through trade negotiations, and overcome supply-side constraints through improved governance, increased attention to economic issues, resource mobilisation, public sector like budgetary allocation and fiscal incentives, donor community with the help of Aid for Trade and private sector through Public Private Partnership modality, said chief executive director of South Asia Watch on Trade, Economics and Environment (SAWTEE) Dr Ratnakar Adhikari presenting his paper on 'Nepal’s agricultural trade: Opportunities and challenges' at the International Workshop on Agribusiness Promotion here in the valley today.
More than two-thirds of Nepalis depend on agriculture for their livelihood and agriculture also continues to represent a significant portion in Nepal's trade basket, he said, adding that the National Trade Integration Strategy 2010 has listed seven agricultural and forest-based products — out of 12 products identified — as having export potential.
There should be structural transformation to promote trade in manufacturing agriculture products as transport infrastructure is critical for the trade of perishable goods like agricultural products, added Adhikari. "Nepal’s transport infrastructure is the worst in the region adding to supply side constraints."There is no significant barrier to agriculture import in the country and it also has export potential due to very low tariff barriers for Nepali exports because of the country's membership of the global trade regime World Trade Organisation (WTO), regional agreement on trade — South Asian Free Trade Area — and Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) free trade agreement and also bilateral trade agreement with India that has ensured zero tariff access virtually for all agriculture exports from Nepal.
"However, the country has failed to take advantages due to para-tariff barriers and non-tariff barriers that are still prevalent in neighbouring countries including India and China," he added.
High tariff barriers on certain agricultural products in the markets of developed countries coupled with India and Bangladesh imposing several 'other duties and charges' on Nepali agriculture products have limited export potential, he said, adding that India’s application of quarantine in a non-transparent and discriminatory manner, its requirement regarding 'wooden packaging', Norway’s refusal to import honey from Nepal due to absence of pesticide control programme, difficult customs procedures in India, subsidies on agricultural products provided by several OECD countries and India have made Nepali agriculture products less competitive.
Organised by Project for Agriculture Commercialisation and Trade (PACT) under the Ministry of Agriculture and Cooperatives, Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and World Bank Group, the three-day international seminar that saw participation from seven countries brainstormed on three key issues; removing trade barriers to facilitate regional and international trade, identifying critical elements in accelerating Public Private Partnership in agribusiness, and creating markets for Nepal's niche green products.
Showing posts with label OCED. Show all posts
Showing posts with label OCED. Show all posts
Tuesday, April 10, 2012
Sunday, November 27, 2011
Nepal offers tax relaxation to Indian investors, to share banking, tax evasion information
The two South Asian neighbours sign DTAA to encourage trade, economic cooperation
Nepal can attract more Indian investment as the revised Double Taxation Avoidance Agreement (DTAA) signed today has provided tax relaxation to Indian investors and traders in India once they pay tax in Nepal.
"It will provide tax stability, facilitated mutual economic cooperation and stimulated flow of investment, technology and services between the two South Asian neighbours," said finance minister Barsha Man Pun after signing the agreement with his Indian counterpart Pranab Mukherjee, who flew to Kathmandu today morning to sign the pact.
The revised agreement — that replaces the old one signed in 1987 — has also lowered the threshold of tax rates on dividends and interest to reflect Nepal’s wish to attract more foreign direct investment (FDI).
An Indian investor, who has more than 10 per cent investment in Nepal, can take home more benefit as one is liable to pay only five per cent tax on dividends. Similarly, the old accord that was according to UN provision had 15 per cent tax on interest but the revised one has brought it down to 10 per cent.
"It will help in boosting overall business and investment climate," he said, adding that Nepali and Indian authorities can also share information on banking and tax evasion according to new agreement.
The revised DTAA that incorporated provision of exchange of information on banking and tax evasion according to the provisions of Organisation for Economic Cooperation and Development (OECD) will facilitate effective tax collection and controlling of fiscal evasion.
Though, it was planned to sign along with Bilateral Investment Promotion and Protection Agreement (BIPPA) during Prime Minister Baburam Bhattarai’s India visit in October, the accord could not be signed due to some technical reason, said Mukherjee.
"BIPPA and DTAA will provide necessary help to expand trade and investments between the two neighbours," he said, adding that the meeting between the commerce secretaries of both the countries in December will identify new areas of cooperation, projects and funding."The mechanism will strengthen and deepen our bilateral relations, and we would be in a position to move forward and expand our trade and other economic activities," the Indian finance minister added.
India is the biggest source of foreign investments and also largest trading partner of Nepal. Indian firms are the biggest investors accounting for about 47.5 per cent of total approved foreign direct investments of the country.
The tax relaxation in DTAA will help Nepal attract more investment from India, said finance secretary Krishna Hari Baskota.
The FDI flows into the countries where the environment is FDI-friendly, has skilled labour, uninterrupted power supply and easy link to market. "Nepal is trying to create conducive environment for the FDI inflow as more investment will result into more employment and production pulling the inflation down," he added.
The negotiation for the revision of DTAA has started when the current Prime Minister Dr Baburam Bhattarai was finance minister back in 2008.
Nepal can attract more Indian investment as the revised Double Taxation Avoidance Agreement (DTAA) signed today has provided tax relaxation to Indian investors and traders in India once they pay tax in Nepal.
"It will provide tax stability, facilitated mutual economic cooperation and stimulated flow of investment, technology and services between the two South Asian neighbours," said finance minister Barsha Man Pun after signing the agreement with his Indian counterpart Pranab Mukherjee, who flew to Kathmandu today morning to sign the pact.
The revised agreement — that replaces the old one signed in 1987 — has also lowered the threshold of tax rates on dividends and interest to reflect Nepal’s wish to attract more foreign direct investment (FDI).
An Indian investor, who has more than 10 per cent investment in Nepal, can take home more benefit as one is liable to pay only five per cent tax on dividends. Similarly, the old accord that was according to UN provision had 15 per cent tax on interest but the revised one has brought it down to 10 per cent.
"It will help in boosting overall business and investment climate," he said, adding that Nepali and Indian authorities can also share information on banking and tax evasion according to new agreement.
The revised DTAA that incorporated provision of exchange of information on banking and tax evasion according to the provisions of Organisation for Economic Cooperation and Development (OECD) will facilitate effective tax collection and controlling of fiscal evasion.
Though, it was planned to sign along with Bilateral Investment Promotion and Protection Agreement (BIPPA) during Prime Minister Baburam Bhattarai’s India visit in October, the accord could not be signed due to some technical reason, said Mukherjee.
"BIPPA and DTAA will provide necessary help to expand trade and investments between the two neighbours," he said, adding that the meeting between the commerce secretaries of both the countries in December will identify new areas of cooperation, projects and funding."The mechanism will strengthen and deepen our bilateral relations, and we would be in a position to move forward and expand our trade and other economic activities," the Indian finance minister added.
India is the biggest source of foreign investments and also largest trading partner of Nepal. Indian firms are the biggest investors accounting for about 47.5 per cent of total approved foreign direct investments of the country.
The tax relaxation in DTAA will help Nepal attract more investment from India, said finance secretary Krishna Hari Baskota.
The FDI flows into the countries where the environment is FDI-friendly, has skilled labour, uninterrupted power supply and easy link to market. "Nepal is trying to create conducive environment for the FDI inflow as more investment will result into more employment and production pulling the inflation down," he added.
The negotiation for the revision of DTAA has started when the current Prime Minister Dr Baburam Bhattarai was finance minister back in 2008.
Monday, December 14, 2009
Mauritius ranks top in ‘Paying Tax’ list in Sub-Saharan Africa
PORT LOUIS: Among the 46-Sub Saharan African countries Mauritius tops the rank in Paying Tax, followed by Botswana and South Africa in the second and third positions.
The report – a joint publication of the World Bank, International Finance Corporation, and PricewaterhouseCoopers – is the fifth edition that the World Bank Group’s Doing Business project has included the "paying taxes" indicator.
The indicator measures the ease of paying taxes in 183 economies around the world. Besides paying taxes, the Doing Business project provides quantitative measures of regulations in nine other areas: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, trading across borders, enforcing contracts, and closing a business.
However, Mauritius ranks 12th – slipping one position down from last year’s 11th rank – among the 183 economies around the world. “A medium-size company must make seven payments in a given year in Mauritius, whereas the Sub-Saharan African average is 37.7 and OCED average is 12.8 payments per year,” according to the report.
Similarly, it takes 161 hours per year to pay the tax in Mauritius whereas in Sub-Saharan African country, it takes 306 hours in an average.
The paying taxes indicator measures tax systems from the point of view of a domestic company complying with the different tax laws and regulations in each economy. The case study company is a small to medium-size manufacturer and retailer, deliberately chosen to ensure that its business can be identified with and compared worldwide.
The indicator covers the cost of taxes borne by the case study company and the administrative burden of tax compliance for the firm. Both are important for business. They are measured using three subindicators: the total tax rate (the cost of all taxes borne), the time needed to comply with the major taxes (profit taxes, labour taxes and mandatory contributions, and consumption taxes), and the number of tax payments.
The paying taxes indicator measures all taxes and contributions mandated by government at any level (federal, state, or local) as they apply to the standardised business. The total tax rate subindicator measures the impact of taxes and contributions on the company’s income statements. It includes the corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, and vehicle and road taxes. The other two subindicators, on the time to comply and number of payments, also include taxes and contributions withheld or collected, such as sales tax or value added tax (VAT).
In this year’s report, the top reformer was Timor-Leste, which introduced a new tax law, streamlined the business tax regime, and simplified tax administration. Between June 2008 and May 2009, 45 economies made it easier to pay taxes as measured by Doing Business, almost 25 per cent more than in the previous year, according to the report.
“Eastern Europe and Central Asia had the most reforms for the third year in a row, with 10 economies reforming, whereas around the world on average, the case study company faces a total tax rate (percentage of profit paid out in taxes) of 48.3 per cent and spends 286 hours a year, and makes 31 tax payments, to comply with tax laws,” the global report said.
In the EU the average total tax rate for the case study company fell from 46 per cent to 44.5 per cent reflecting in part cuts in the corporate income tax rate implemented in 2007-08 in Germany and Italy.
The number of taxes levied on the company averages 9.5 globally. The average for the EU is almost 11.
Mauritius has climbed to 17th position from 24th in the global Doing Business 2010 report. It has been ranked first among 46 Sub-Saharan Africa economies. The Indian Ocean Island country has climbed seven position up to rank 17 from last year’s 24 position, according to the Doing Business Report – measuring business regulation. Out of the 10 category in the overall report, it has improved in the four categories but slipped in the five categories, whereas it is in the bottom of one of the category – closing business – compared with last year’s report.
The top 10
Mauritius – First
Botswana – Second
South Africa – Third
Malawi – Fourth
Seychelles – Fifth
Zambia – Sixth
Comoros – Seventh
Ethiopia – Eighth
Swaziland – Ninth
Rwanda – Tenth
The report – a joint publication of the World Bank, International Finance Corporation, and PricewaterhouseCoopers – is the fifth edition that the World Bank Group’s Doing Business project has included the "paying taxes" indicator.
The indicator measures the ease of paying taxes in 183 economies around the world. Besides paying taxes, the Doing Business project provides quantitative measures of regulations in nine other areas: starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, trading across borders, enforcing contracts, and closing a business.
However, Mauritius ranks 12th – slipping one position down from last year’s 11th rank – among the 183 economies around the world. “A medium-size company must make seven payments in a given year in Mauritius, whereas the Sub-Saharan African average is 37.7 and OCED average is 12.8 payments per year,” according to the report.
Similarly, it takes 161 hours per year to pay the tax in Mauritius whereas in Sub-Saharan African country, it takes 306 hours in an average.
The paying taxes indicator measures tax systems from the point of view of a domestic company complying with the different tax laws and regulations in each economy. The case study company is a small to medium-size manufacturer and retailer, deliberately chosen to ensure that its business can be identified with and compared worldwide.
The indicator covers the cost of taxes borne by the case study company and the administrative burden of tax compliance for the firm. Both are important for business. They are measured using three subindicators: the total tax rate (the cost of all taxes borne), the time needed to comply with the major taxes (profit taxes, labour taxes and mandatory contributions, and consumption taxes), and the number of tax payments.
The paying taxes indicator measures all taxes and contributions mandated by government at any level (federal, state, or local) as they apply to the standardised business. The total tax rate subindicator measures the impact of taxes and contributions on the company’s income statements. It includes the corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, and vehicle and road taxes. The other two subindicators, on the time to comply and number of payments, also include taxes and contributions withheld or collected, such as sales tax or value added tax (VAT).
In this year’s report, the top reformer was Timor-Leste, which introduced a new tax law, streamlined the business tax regime, and simplified tax administration. Between June 2008 and May 2009, 45 economies made it easier to pay taxes as measured by Doing Business, almost 25 per cent more than in the previous year, according to the report.
“Eastern Europe and Central Asia had the most reforms for the third year in a row, with 10 economies reforming, whereas around the world on average, the case study company faces a total tax rate (percentage of profit paid out in taxes) of 48.3 per cent and spends 286 hours a year, and makes 31 tax payments, to comply with tax laws,” the global report said.
In the EU the average total tax rate for the case study company fell from 46 per cent to 44.5 per cent reflecting in part cuts in the corporate income tax rate implemented in 2007-08 in Germany and Italy.
The number of taxes levied on the company averages 9.5 globally. The average for the EU is almost 11.
Mauritius has climbed to 17th position from 24th in the global Doing Business 2010 report. It has been ranked first among 46 Sub-Saharan Africa economies. The Indian Ocean Island country has climbed seven position up to rank 17 from last year’s 24 position, according to the Doing Business Report – measuring business regulation. Out of the 10 category in the overall report, it has improved in the four categories but slipped in the five categories, whereas it is in the bottom of one of the category – closing business – compared with last year’s report.
The top 10
Mauritius – First
Botswana – Second
South Africa – Third
Malawi – Fourth
Seychelles – Fifth
Zambia – Sixth
Comoros – Seventh
Ethiopia – Eighth
Swaziland – Ninth
Rwanda – Tenth
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