Government inefficiency hits private sector

Government inefficiency has hit the private sector, according to business community.

"Government inefficiency has fueled most of the problems," the district chambers' representatives from across the country blamed the Finance Ministry and Revenue Administration at a national workshop on 'Revenue administration and Current problems' here today.

The private sector lambasting the ministry for its inefficiency, red-tapism and terror it has created among the business community, also blamed the ministry for failing to walk its talk.

"Tax officials are not entrepreneur-friendly," they complained, adding that the tax administration had started 'Operation Black' in Makawanpur and 'Operation Swipe' in Bara to terrorise the business people.

The government is trying to control market by fixing Maximum Retail Price (MRP) that is not practical and has failed to create conducive environment for export-oriented industries, though it claims to boost the exports, they said.

A representative asked the ministry to also provide facilities to the business community that is the largest tax payer. "Instead of concentrating on revenue mobilisation only, the ministry should think of facilitating the private sector and creating conducive business environment too," they suggested, asking to resolve the slew of issues like VAT mismatch, increasing the VAT threshold and income tax ceiling, tax return, catagorisation of small businesses, minimising the misunderstanding between the tax officials and private sector, and up-gradation of road infrastructure at the customs.

Accepting the widening gap between the tax administration and business community, director general of the Inland Revenue Department (IRD) Tankamani Sharma, on the occasion, said that earlier mismatch will be resolved with the help of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). "Let’s give a new start from today," he said, requesting the business community to issue VAT bills and keep all the records, according to the law of the land, from today.

The ministry has finalised the tax administration reform plans — the three-year reform plan and five-year strategic plan — to make the tax administration more business-friendly and increase the tax net instead of tax ceiling, he added. "It will be announced within a week."

Similarly, the department has also planned to celebrate Tax Day every year and honour the largest tax payer recognising the contribution made to the economy, Sharma said, adding that a High Level Tax Administration panel is also on cards to facilitate the system, apart from categorisation of the businesses that are under the VAT threshold of Rs 2 million, tax payer education programmes round the year and establishing tax offices in all the 75 districts.

"However, the department will keep vigil and monitor the market, if the business people are issuing VAT bills or not for the effective implementation of the new policies," he said asking the private sector to cooperate in the move.

The tax payers should be treated with dignity, vice-president of the FNCCI Bhawani Rana said, asking the government to fulfill its earlier promises to boost the confidence of the private sector.

"The ministry is ready to facilitate the private sector for the economic growth," said finance secretary Krishnahari Baskota.

SImilarly, caretaker finance minister Barshaman Pun also promised to co-operate the private sector and help boost their confidence.

 

Income tax ceiling to go up, tax compliance cost high

KATHMANDU: Finance Ministry has prepared to increase the income tax ceiling.

However, the delay in full-fledged budget has delayed the decision,” said finance secretary secretary Krishnahari Baskota. Currently, a fixed income of over Rs 160,000 of unmarried and Rs 200,000 of a married is out of the tax ceiling. “But with the increased inflation, the income tax ceiling also needs upward reveision,” he said, adding that the full-fledged budget will increase the ceiling. But he did not elaborated on the figures. Similarly, the business people of Bajura, Jajarkot and Rolpa have to spend almost ten times the cost of tax compliance. "The business people have to pay around Rs 10,000 to go to the tax office and get registered in Personal Account Number (PAN), which is a mere Rs 1,200 annually," the representatives of the Farwest Region said, complaining the government for being more concentrated on big-businesses' issues only. "We are neglected because we contribute only 20 per cent in the total revenue mobilization and geographically excluded too," they added.

MRP draws criticism from private sector, consumer groups

Both the private sector and consumer groups have condemned the government's initiative to set the maximum retail price (MRP) of essential consumer goods.

The government's decision on  MRP is 'against open market policy’ the umbrella organisation of the private sector said, whereas consumer rights groups have said that the MRP has been based on false price.

"The government has adopted an unethical market practice to control price hike," the FNCCI said, suggesting the government to control price hike by releasing low priced food items in the market through state enterprises.

Setting the MRP of consumer goods in an open market has raised suspicions that the government is heading towards a controlled economy.

Similarly, consumer groups have condemned the maximum retail price set by the government saying it was based on 'false price'. The government set the MRP of 15 essential food items on Thursday.

The government has taken the 'false price' to calculate MRP, said president of National Consumer Forum Premlal Maharjan. "Therefore, the decision will not be able comfort consumers," he said, adding that the government reduced the price of rice (jira masino) assuming its market price to be Rs 55 a kg while the real market price is Rs 52 per kg.

"It shows that the government is itself trapped in the black marketers' net," he said. According to him, the government has taken the prevailing higher price of most essential foods while determining the MRP. "We submitted a letter to the chief secretary today condemning the government's decision on MRP," he said.

The government has set the price of rice, wheat flour, pulses and beans under various categories. It has decided to reduce the price of edible oils by two per cent.

The MRP decision has slashed the market price of goods by Rs one to Rs 13. The government has planned to revise the MRP every fortnight.

Consumer rights activist from Forum for Protection of Consumer Rights-Nepal Jyoti Baniya echoed Maharjan. "The government accepted the proposal of the traders, so there will not be any drastic change in the market price," he said, adding that consumer groups are closely watching if the decision will be implemented.

Meanwhile, the Department of Commerce and Supply Management has started monitoring food prices according to the MRP enforced from today. "We have included MRP in our monitoring list and it will be strictly enforced," said director of the department Prem Prasad Paudel. "Traders violating the MRP provision will be punished according to law."

However, consumer activists do not believe that the department will be able to keep its promise given its unsuccessful history. The department has failed to enforce the provision of keeping a price-list, a primary requisite of Consumer Protection Act, despite four years of market monitoring. Still, over 80 per cent of grocery shops in Kathmandu have not kept a price-list.

Meanwhile, president of Nepal Retailers' Association Pavitra Bajracharya has said that the MRP will be applicable in retail shops only after one week. "We need a week to inform retail shops," he said. According to him, retailers will not be able to buy the food items on the government prescribed price in the market.

Government fixes MRP of 15 food items against the free market policy

The government has, at last, fixed Maximum Retail Prices (MRPs) for 15 daily consumable food items promising to provide relief to the people.

However, lowering the prices of consumable goods ‘unnaturally’ by Rs 1 to 13 per kg, the government has not only backtracked the free market policy and curtailed a consumer’s rights, but also promoted ‘state syndicate’ in cooperation with some traders.

One one hand a consumer cannot choose the quality of goods and pay the price accordingly and on the other, the prices will never come down the government fixed price helping traders to cartel.

The government has reduced prices of mung pulse by Rs 13 per kg and wheat flour price by Rs 1 per kg.
A meeting chaired by chief secretary Lila Mani Poudel today fixed the MRPs of four varieties of rice and two varieties each of mas pulse, lentil and mung pulse, apart from gram, white pea, bean, wheat flour refined flour and all kinds of edible oils.

“The decision will be effective from tomorrow but the prices are subject to review every fortnight, if necessary.

Officials from the Ministry of Commerce and Supplies, home, agriculture and private sector representatives, especially traders were also present in the meeting. The traders also agreed to abide by the MRP, according to the ministry. Or they will be punished.”
But traders sought one week’s time to implement the decision as they have to clear the stocks of earlier purchased goods.

Similarly, the government has directed Salt Trading Corporation to fix the MRP of salt and sugar.