Monday, November 28, 2022

MCA-Nepal calls for bids to construct 400 kV transmission lines

Millennium Challenge Account Nepal (MCA-N) – the implementing agency of Millennium Challenge Corporation (MCC) of the US published a global tender today to construct 315-km long transmission lines. The US government-funded MCA-N – issuing a public notice today – called for bids to construct the infrastructure.

According to the notice, the MCA-N has divided the total construction into three sections. “A 400 kV transmission line will be constructed along Lapsiphedi-Ratamate-New Hetauda stretch measuring 117-km,” the notice reads, adding that a 90-km long 400 kV transmission line in Ratamate-Damauli and New Damauli-New Butwal segment will also be expedited under the project. “The MCA-N has set a deadline of March 27, 2023 to apply for the contract.”  

The MCC Compact, which was approved by the Parliament after a huge controversy, has provided Nepal a grant of $500 million to construct high-powered transmission lines and to upscale the highways. The government will be investing $130 million from its side in the five-year long projects under the MCC Compact.

The Millennium Challenge Corporation (MCC) is a bilateral US foreign aid agency established by the US Congress in 2004. It is an independent agency separate from the State Department and USAID. The government signed the MCC grant in 2017 after determining its goals to modernise Nepal's energy and transportation sectors with the hope of helping nearly 80 per cent of the total population. Though, signed in 2017, it took the parliament five years to ratified MCC compact as the compact was ratified on February 27, 2022, with a majority with certain interpretive declaration through understanding between all national parties, due to huge opposition from several quarters of the society.

The MCC-Nepal Compact that aims to increase the availability and reliability of electricity, maintain road quality, and facilitate regional trade– helping to spur investments, accelerate economic growth, and reduce poverty, is a five-year term fixed project, once it starts its work.

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.

Sunday, November 27, 2022

Central bank slashes interest rate gap to pull interest rate down

The central bank has – through the first quarter review of Monetary Policy – slashed the spread rate (difference between lending and borrowing rates) of commercial and development banks to pull the interest rates down.

According to the first quarter review of Monetary Policy for the current fiscal year, the commercial banks spread rate will come down to 4 per cent from the current 4.4 per cent, whereas the spread rate of the development banks has been brought down to 4.6 per cent from current 5 per cent. The central bank also said that it will monitor the premium regularly to not let the lending rate to go up.

Though, the central bank dismissed that it has reduced the spread – to pull down the interest rate due to pressure from the private sector, the private sector itself is, however, not satisfied. The private sector has protested against the central bank and banks and financial institutions (BFIs) alleging them of pushing the interest rates up making the cost of doing business dearer.

But executive director of the central bank’s Research Department Dr Prakash Shrestha said that the downward revision of spread has been according to the central bank policy to bring spread rate slowly down, which is expected to bring the interest rate on loans down.

Though, the private sector is not satisfied saying that the interest rate is still higher, the banks and financial institutions are going to lose a huge portion of their profits due to sqeeze in spread. Some 14 commercial banks will feel the heat of the spread rate reduction as some of the commercial banks already have less then 4 per cent spread rate. A banker, without wanting to be named, said that the commercial banks will lose some Rs 10 billion in the profits due to lower spread rate. According to the unaudited reports of first quarter, NIC Asia Bank has 4.39 per cent spread rate, whereas Citizens Bank International has 3.53 per cent spread rake, making an average of 4.01 per cent spread rate of the total 26 commercial banks. 

The private sector’s another concern working capital loan guidance will be addressed, based on the suggestions received. “It has been operational, and will be addressed as and when the suggestions we receive,” Shrestha added.

The central bank, unveiling the first quarter review of the Monetary Policy 2022- 23, also reads that the BFIs, which are unable to provide loans in the designated areas due to liquidity crunch can calculate the shortfall from mid-December 2023 on basis of mid- June 2023. “The fine imposed on BFIs will be reviewed based on the liquidity risk, if the specified loan-deposit ratio is not reached,” it reads, adding that investments made by BFIs in the bonds issued by public limited companies related to the agricultural sector in the secondary market will also be allowed to be counted within the specified limits so that the BFIs has to invest minimum loans in that sector. “The microfinance financial institutions will, however, have to publish the base rate on monthly basis from mid-January.”

The central bank has also given continuity to the major policy of the Monetary Policy as the pressures on price and external sector stability still remain. Likewise, the Monetary Policy has maintained the targets and projections.

Wednesday, November 23, 2022

Shah becomes highest tax payer

Vijaya Kumar Shah, chairman of the Jawalakhel Group of Industries became the largest taxpaying Nepali in the last fiscal year. 

Shah, who leads Jawalakhel Group of Industries that incorporates companies like Jawalakhel Distillery, Himalayan Distillery, Raj Brewery, Asian Distillery and Vijay Distillery, received recognition as the largest tax paying person a fiscal year ago on the occasion of the 9th National Tax Day, also.

Finance Secretary Krishna Hari Pushkar honoured Shah along with Surya Nepal Pvt Ltd – as the largest institutional taxpayer today at a programme organised by the Inland Revenue Department (IRD) to mark the 11th National Tax Day 2022.

During the last fiscal year 2021-22, Surya Nepal paid Rs 10.72 billion in taxes, up from Rs 9.34 billion a fiscal year ago. The company sells cigarettes, matchboxes, incense sticks and confectionery.

The government honours largest taxpaying individuals and organisations under 15 categories of taxes on the occasion of the National Tax Day every year.

The government also honoured Nepal Telecom under the largest income taxpayer category, whereas the producer of refined oil and vegetable ghee Shiva Shakti Ghee and Rajesh Metal Crafts were honoured under export-based and special industry categories. The OBC Feeds and Food was honoured under the agriculture and livestock industry category. 

Likewise, Chhimek Laghubitta Bittiya Sanstha received honour under cooperative category, Nabil Bank under banking sector and IME Remittance under remittance category are also honoured for their largest tax contribution in their respective sectors in the last fiscal year.

The Inland Revenue Department (IRD) Nepal has honoured Nabil Bank chief executive officer (CEO) Gyanendra Prasad Dhungana for the bank’s contribution. Nabil Bank had paid Rs 2.79 billion in taxes in the last fiscal year. This is the seventh consecutive year – in the past 10 years – that Nabil Bank has been honoured for its contribution to the national exchequer. “The Bank has paid Rs 18.38 billion in taxes to the state in the last 10 years. “The bank has also distributed Rs 14.45 billion in cash dividends and bonus shares worth Rs 18.8 billion to its investors,” according to the bank.

According to a press note issued by the Inland Revenue Department, the programme to commemorate the 11th National Tax Day also witnessed Nepal Re-insurance Company being honoured as the top taxpayer in the insurance category. Biratnagar-based Nobel Medical College and Teaching Hospital was felicitated as the top taxpayer in the health and education categories. 

Manakamana Darshan, the operator of the cable car in Kurintar and Chilime Hydropower were honoured as the highest taxpayers in tourism businesses and energy-oriented industries, respectively. Similarly, Nepal Stock Exchange topped the list among medium-scale taxpayers.

IME Ltd, the first money transfer company in Nepal, was honoured as the highest taxpayer in the remittance and money transfer category, whereas Hansraj Hulaschand and Co was honoured for its contribution to the commodity trade sector.

According to the department, Gorkha Brewery, the producer of Tuborg, Carlsberg and Gorkha beers, Somersby Apple Cider and Red Bull energy drink, was announced as the largest contributor in the value-added tax (VAT) category. Likewise, Mangalam Industries Pvt Ltd – a manufacturer of water supply, plumbing, sanitation, and drainage piping solutions and also the first CPVC Pipes and Fittings manufacturer and leading polymer piping systems manufacturer and exporter from Nepal – was the highest taxpayer company in the manufacturing industry.  during fiscal year 2021-22. According to the press note of the IRD, the award was handed over to chairman Dr Sudarshan Churiwal and director Mrs Shashi Churiwal of the company.

In the last fiscal year, Rs 429.27 billion in revenue has been collected, against the target of Rs 450.34 billion, according to the department press note. “The total number of taxpayers in the country, including the businesses and individuals holding a permanent account number (PAN) reached 4.81 million as of 2020-21, among which, some 3.05 million are individual PAN card holders, by the end of the last fiscal year.”

Tuesday, November 22, 2022

मागमा आएको संकुचनले राजश्व संकलनमा दबाब

नीजि क्षेत्रले मागमा आएको संकुचनको असर उद्योग क्षेत्रसँगै सरकारको राजश्वमा समेत परेको जनाएको छ । 

राष्ट्रिय कर दिवस २०७९ को अवसरमा अर्थ मन्त्रालयका राजश्व सचिव रामेश्वर दंगाल र आन्तरिक राजश्व विभागका महानिर्देशक रितेशकुमार शाक्यसँग अन्तरक्रिया गर्दै नेपाल उद्योग परिसंघले मागमा आएको संकुचनको असर उद्योग क्षेत्रसँगै सरकारको राजश्वमा समेत परेको जनाएको हो । परिसंघ सचिवालयमा आयोजित “परिसंघमा परिचर्चा” कार्यक्रममा बोल्दै परिसंघका अध्यक्ष विष्णुकुमार अग्रवालले मागमा आएको संकुचनको असर उद्योग क्षेत्रसँगै सरकारको राजश्वमा समेत परेका कारण त्यसको समग्र असर अर्थतन्त्रले भोगिरहेको बताए । उनले अर्थतन्त्रमा देखिएको समस्या समाधानका लागि ब्याजदर घटाउने, समग्र माग बढाउने खालको नीति अलम्बलन गर्नुपर्नेमा जोड दिए। 

परिसंघले गरेको सर्वेक्षण अनुसार उद्योगको प्रकृति अनुुसार ८० प्रतिशतसम्म मागमा संकुचन आएको देखिएको उनको भनाइ थियो । अर्थतन्त्रमा संकुचन बढ्दै जाँदा उद्योगसँगै राजश्व पनि थप प्रभावित हुने र त्यसको प्रत्यक्ष असर पूँजीगत खर्चका लागि सरकारलाई रकमको अभाव हुन सक्ने उनले बताए। 

उनले बहुदर भ्याट प्रणाली लागू गर्न आवश्यक रहेको स्मरण गराउँदै भारतलगायत अन्तर्राष्ट्रिय बजारमा प्रतिस्पर्धी गराउन पनि बहुदर भ्याट प्रणालीको विकल्प नभएकोमा जोड दिए ।  

राजश्व सचिव रामेश्वर दंगालले राजश्व संकलनमा गिरावट आउँदा त्यसले वित्तिय चाप पारेको स्विकारे । अर्थतन्त्रमा परेको दबाबबारे निजी क्षेत्र जानकार रहेको भन्दै उनले राजश्वमा योगदान दिन उद्योगी व्यवसायीलाई आग्रह गरे । अर्थतन्त्रमा स्थायित्व ल्याउने गरी मौद्रिक नीतिले औजार प्रयोग गर्दा बजेटले लिएका उद्देश्य हासिल गर्न दबाब परेको पनि सचिव दंगालको भनाइ थियो । उनले राजश्वमा दबाब पर्दै गए आन्तरिक ऋण उठाउनुपर्ने र त्यसको प्रत्यक्ष असर निजी क्षेत्रमा जाने लगानी योग्य तरलतामा थप दबाब पर्ने पनि बताए। 

आन्तरिक राजश्व विभागका महानिर्देशक रितेशकुमार शाक्यले निजी क्षेत्रलाई दोहोरो कर नपरोस् भन्नेमा सरकार सचेत रहेको भन्दै कर अधिकारी र करदाताबीच भौतिक सम्पर्क नै हुन नपर्ने गरी कर प्रशासनमा सुधार गर्न लागेको जानकारी गराए । यसले कर प्रशासन र निजी क्षेत्रप्रति लाग्ने आरोप सहनु नपर्ने उनको भनाई छ । निजी क्षेत्र नफस्ट्याई सार्वजनिक क्षेत्र पनि अगाडि बढ्न नसक्ने समते उनले बताए। 

उक्त अवसरमा नेपाल उद्योग परिसंघका उपाध्यक्ष राजेश अग्रवालले उद्योगहरु फस्ट्याउन नीतिगत स्थिरता आवश्यक रहेको बताएका थिए। आर्थिक ऐन र औद्योगिक व्यवसाय ऐनका व्यवस्था एक आपसमा बाँझिदा औद्योगिक प्रबद्र्धनमा असर परेको बताउँदै उनले तयारी वस्तु र कच्चा पदार्थ अन्त शूल्क लगाउँदा राम्रो वातावरण नबनेको बताए। यस्तै उनले तीन वटै तहबाट कर संकलन भईरहेकोमा त्यसमा सुधार ल्याउन एकद्धार प्रणालीबाट मात्रै कर संकलन गर्न सुझाव दिए । 

छलफलमा उद्योगी व्यवसायीहरुले कर तथा राजश्वका विषय, अर्थतन्त्रमा सुधार ल्याउन चालिनुपर्ने कदमका विषयमा सुझाव एवं जिज्ञासा राखेका थिए ।

Wednesday, November 16, 2022

External sector improves after 14 months

After 14 months, money coming into the country has recorded a surplus than the money going out of the country, which has improved the external sector.

According to the ‘Current Macroeconomic and Financial Situation of Nepal’, published today by the central bank, the Balance of Payment (BoP) recorded a surplus of Rs 12.43 billion in the first three months of the current fiscal year as the remittance and foreign direct investment (FDI) inflow increased over the period.

For the last 14 months, the country was facing BoP deficit. As of mid-October last year, the country was in BoP deficit of Rs 87.71 billion. In the US Dollar terms, the BoP remained at a surplus of $91.8 million in the first quarter compared to a deficit of 741.2 million in the first quarter of last year.

The BoP records current account, capital account and financial account of a country’s financial transactions with the rest of the world. It is one of the key indicators to show a country’s net balance in terms of foreign currency reserves.

With the BoP surplus, gross foreign exchange reserves also increased by 2.5 per cent to Rs 1.246 trillion in mid-October from Rs 1.215 trillion in mid-July. According to the central bank, the foreign currency reserve is sufficient for merchandise and services imports of 8.3 months.

In the first three months of the current fiscal year, remittance inflows also increased by 16.8 per cent to post Rs 281.05 billion,, adding Rs 94 billion in a month, due to impressive migrant workers outflow in the recent months of the current fiscal year, and also due to government’s inability to create jobs in the country.

Likewise, imports decreased by 16.2 per cent to Rs 401 billion against an increase of 63.7 per cent a year ago due to government and central bank’s import restrictions, according to the central bank data.

According to the central bank, capital transfer also increased by 34.8 per cent to Rs 2.59 billion and net FDI inflow recorded Rs 79.6 million. In the first quarter of the last fiscal year, capital transfer and net FDI inflow amounted to Rs 1.92 billion and Rs 5.07 billion, respectively.

Consumers have to pay extra to watch FIFA World Cup

Nepali television viewers have to pay extra to watch the world cup football unlike previous years, according to an apex court decision.

The Supreme Court today issued a ruling in support of imposing extra charges on customers to give them access to the live broadcast of the FIFA World Cup 2022.

An advertising agency, Media Hub had earlier claiming that it has obtained exclusive broadcast rights to the FIFA World Cup, has decided to collect Rs 565 extra (including VAT) per set-top box stating that domestic advertisements do not cover their costs. 

But advocates Kishor Poudel and Anupam Bhattarai filed a writ petition stating that Nepalis didn’t have to pay extra to watch previous World Cups. They also claimed that the additional fees this time was unlawful. On November 8, a single bench of Justice Prakashman Singh Raut has issued the interim order asking the concerned not to charge the customers until the final verdict is made.

But justice duo Prakash Kumar Dhungana and Manoj Kumar Sharma today said that there is no need to continue the short-term interim order issued on November 8. “Watching the World Cup football by paying extra is not a regular but an optional issue for the viewers,” reads the Supreme Court verdict. The matches will be shown live on Himalaya TV.

There also appears to be an option in the agreement between Himalaya TV and Media Hub that some important matches would be broadcast free of cost, which means that customers, who do not pay extra too can watch at least four important matches. 

“We welcome the court’s verdict,” said marketing director at Media Hub Siddhartha Dhital. “All the work for broadcasting the world cup matches had been halted after the court’s interim order,” he said, adding that they will now work 24/7 to ensure the broadcast. 

The 2022 FIFA World Cup – to be hosted by Qatar – kicks off from November 21, and will continue until December 18. A total of 64 matches will be played during a month-long championship. The first match will be played between the host Qatar against Ecuador. Worldwide, billions of soccer fans watch the live coverage of the four-yearly football extravaganza on TV.

According to Dhital, Worldlink and Vianet Communication, two of the leading internet and television services providers, have already signed agreements with Media Hub to broadcast the matches.

Claiming that Media Hub has bid for the broadcast rights for around Rs 250 million for the month-long event, Dhita,l said that an additional Rs 150 million will be spent for promotion and technical support. 

For the first time in history, a Middle Eastern country is hosting the World Cup football. 

According to the international media reports, the Qatar World Cup will be the most expensive event as it will cost around $220 billion to Qatar, some 20 times more than the cost of last World Cup in Russia. Criticising the high prices of the tickets to the World Cup matches football fans around the world accused FIFA.

The most expensive tickets on general sale for the December 18 final at Lusail Stadium cost 5,850 Qatari riyals (£1,179), which is 46 per cent higher than the £807 ticket price for the 2018 final match that France won.

Reuters reports that While fans in Russia paid an average of 214 pounds for a seat, tickets to matches in Qatar cost an average 286 pounds, according to a study by Keller Sports.