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.

Cottage industry fair concludes

Pampha Bhusal, minister for Women, Children and Social Welfare today honoured 13 best entrepreneurs and presented awarads to them.Prabin Dhaka Udhyog, Jhapa received Rs 25,000 cash prize sponsored by Federation of Nepalese Chambers of Commerce and Industry. Similarly, Swanig Achar Udhyog, Kathmandu received Rs 15,000 cash prize sponsored by Nepal Chamber of Commerce, at the concluding ceremony of the 19th edition of National Small and Cottage Industry Exhibition.Gyan Devi Handicraft, Lalitpur bagged Rs 10,000 cash prize sponsored by Handicrafts Association of Nepal. Makwanpur Bamboo Handicrafts bagged the cash prize of Rs 10,000 sponsored by Nepal Cottage and Small Industries Federation, while Rs 10,000 cash prize sponsored by National Federation of Cottage and Small Industries was awarded to Milan Radipakhi Udhyog, Rumjatar.Rara Handmade, Mugu; Langhali Dhaka Kapada Udhyog, Ramechhap; Rochak Handicrafts, Kathmandu; Kanchan Khukuri Udhyog, Dhankuta; Bhaibahadur Nigalo Udhyog, Okhaldhunga; Noname Handicrafts, Lalitpur; Purna shoe Centre, Kalikot; Makwanpur Carpentor Woodcraft; Nepal Craft Paper Industries, Kathmandu; Laxmi Fruits Refinery, Ropla; Netra handicrafts, Gorkha and others bagged the best entrepreneur award with Rs 7,000 cash and trophy of 10-tola silver and certificate.Doormilla Dhaka, Udaypur received the best women entrepreneur award of Rs 7,000 cash prize and a trophy.The exhibition, organised to promote products of micro and cottage industries, attracted around 50,000 visitors within the five days. The event provided a platform for micro and small entrepreneurs to explore markets.Together 154 stalls of various products representing 65 districts under 13 different categories were on display-cum-sales in the event. The products from Pashmina to Dhaka clothes, readymade garments, metal crafts, bamboo products, clay and stone goods, leather goods, wooden craft, forestry products, carpets and woollen goods, handmade paper, food to drink items and others — displayed were produced using local raw materials and indegenious technologies.
Cottage and Small Industries Development Board, in association with eight different organisations, has organised the exhibition.

Maoists vow to create conducive investment environment

Maoists today assuring the entrepreneurs' team led by Surendra Bir Malakar, president of Nepal Chamber of Commerce (NCC), said that the fusion of domestic and foreign investment could help fast-paced economic development.
Maoists supremo Prachanda reassured the business fraternity that Maoists will create conducive atmosphere for national and foreign investments."
Conducive environment for promotion of domestic investment would be created as foreign investment could not be brought in without promoting the domestic investment," he said, during the meeting held at Maoists Central Office at Buddhanagar in the valley today."
Labour unrest will be a history and we will encourage healthy relationships between labour and the industrial sector," he tried to assure the business community, adding that the current problem of food and petroleum products' scarcity will be dealt efficiently. The entrepreneurs has asked him of Maoists' version on present petroleum supply situation and scarcity of other commodities.
As Maoists has emerged the largest party securing 120 in FPTP, it vowed to work together with the private sector and create a friendly environment for investment for the fast-paced economic development.
The NCC delegation also asked the Maoist leadership to make clear about their economic policy and public-private partnership. "The new government will formulate the economic policy based on the suggestions of industrialists, economists and traders," Prachanda tried to convince them.Load-shedding, security and capital flight are the major threats that are hitting the private sector hard currently. Promising to implement transitional economic policy at the moment protecting national industrial capitalism, the Maoists top brass urged the private sector to cooperate with them to bring economic development in the country.
"Donot be misguided by the our economic policy," he said assuring the private sector that it will include private sector while formulating all kinds of economic policies. During the meeting that lasted for two hours, Maoist's second-in-command Baburam Bhattarai and economic department chief Krishna Acharya were also present.

Nepali vegetable ghee industry hit hard

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chambers of Commerce (NCC) today urged the government to reduce the import tax on vegetable ghee industry's raw material.
"If it is not reduced, the recent decision of reducing import tax on raw material for vegetable ghee in India will badly hurt Nepali vegetable ghee industry," states a press release issued here by the umbrella organisation of Nepali private sector and NCC.
Issuing a press release, they have stated that the Nepali vegetable ghee and oil industries would be severely affected as it can not compete with the Indian vegetable ghee in the Indian market. The Indian vegetable ghee will be now cheaper than Nepali vegetable ghee.Exports to India will be practically impossible due to high price and quota system, read the releases."Its government's duty to protect Nepali vegetable ghee industry that has an investment of nearly Rs 10 billion and has employed 8,000," the press notes state, adding that it would also have a negative impact on Nepali economy."It will not only create unemployment problem but also hits the revenue collection," states the NCC.
"We want 'Level playing field," they demand. "We urge the government to immediately reduce the import tax to zero per cent on raw materials and concession in VAT."They also sought the dismissal of the quota system that has fixed the limitation to 1,00,000 metric tonnes of exports to India. "The canalising system should be scraped," they appeal, asking the government to scrap the import duty on raw material for vegetable ghee.
A team of Nepal Vegetable Ghee Producers' Association met Kush Kumar Joshi, president of Federation of Nepalese Chambers of Commerce and Industry, the umbrella organisation of Nepali private sector and appraised him of the recent development.
Indian government has, starting from April 1, reduced the import tax raw materials of vegetable ghee to zero. Recently, Arun Banaspati Ghee Industries and Narayan Vegetable Industries have already closed due to loan, increase in the cost of raw materials and problem in production.
According to the office in Biratnagar that issues certificate of origin, the export of vegetable ghee to India till March 13 this year is less than 50 per cent in comparison to the same period last year. The export in the fiscal year 2063-64 stood at 17,848 metric tonnes (Rs 80,48,41,950). But its volume plummetted in the fiscal year 2064-65 to only 8,302 metric tonnes (worth Rs 45,37,63,000).Currently, Pashupati Khadya Tel, Swostic Oil, Sriram Refinery, Manakamana Vegetable and Baba Vegetable are in operation in the eastern region. These industries used to produce upto 40 tonnes of vegetable ghee daily. Most of these industries' target is Indian market.

NCC observes 55th annual general meeting

Industrial security force is a must for secure business-environment, Surendra Bir Malakar, president of Nepal Chamber of Commerce (NCC) while welcoming the guests during the 55th annual general meeting (AGM) of NCC said here today.
"Private sector is able to contribute to the nation building process, provided the government take care of the entrepreneurs," he added. "For sustainable development, Nepal should exploit the sectors that it has comparative and competitive advantages.
Subash Chandra Nembang, the Speaker of Interim Legislature Parliament has inaugurating the AGM. "The private sector has an important role to play for the successful Constituent Assembly election," he said, praising the unity of private sector.Rameshwor Khanal, finance secretary (revenue) said that the investment condition has improved in the recent days. "The government is planning to modernise customs that would help make positive impact on export," he said, adding that the government is also doing its homework for a suitable labour law.
Similarly, the newly elected president of FNCCI, Kush Kumar Joshi requested the private sector to be united so that the government would be forced to listen them.On the occasion, the Speaker awarded 'Nepal Chamber Excellence Award' to Nepal China Chamber of Commerce. He also awarded Letter of Appreciation to different entrepreneurs for their contribution.
Nembang also awarded Lokmanya Golchha, the second vice-president of NCC and Dwarika Nath Pradhananga for their service to the chamber for 20 years, and Rastra Bhusan Chakubaji and Shivabhagawan Agrawal for their service to chambers for 10 years.
The Prime Minister has also sent a message for a successful AGM of NCC.


Letter of Appreciation

*Cargo — Atlas De cargo, Everest De cargo, Himalayan Travels and Tours Pvt Ltd, Speed Way cargo and Himali International cargo Pvt Ltd
*Carpet exporters — Samling Carpet, Himalayan Arts Carpet and Shangrila Carpet
*Readymade garments — Destination Apparels, Heritage Fashion and Nepal Fashion
*Pashmina —Everest Pashmina Knitting and Weaving Industry
*Handicraft — Dawa Handicraft Pvt Ltd
*Courier — DHL express (Nepal) Pvt Ltd
*Export to India — Kiran Shoes Manufactures