Kathmandu. The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has submitted suggestions for the policy and program for the fiscal year 2082.83. Federation President Chandra Prasad Dhakal submitted the suggestions to Minister for Industry, Commerce and Supplies Damodar Bhandari on Wednesday.
During the suggestions, President Dhakal praised the laws recently amended by the government and said that necessary regulations and procedures should be made for their implementation and that implementation of the regulations should be guaranteed at all levels. ‘The policy amendment has sent a positive message,’ he said, ‘However, good governance should be guaranteed from all sides for its implementation.’
The federation has suggested that the use of technology is necessary for business registration, renewal, revenue payment arrangements and cancellation. The Federation has suggested that a system should be made in the policy and program of the coming fiscal year to provide all business services through a business icon in the citizen app. The Federation has suggested that all government services should be streamlined in the name of smart services.
Since foreign investment has been limited to 0.2 percent of the gross domestic product in the last 2 years, the Federation has also suggested that a program called Investment Campaign should be widely run in Nepal and abroad to raise investment resources. The Investment Board and the Department of Industry need to be merged and restructured. For the full implementation of the One Stop Center, arrangements should be made so that investors do not have to go elsewhere after submitting their files at one place.
Since there is a trend of sudden changes in revenue-related laws by bringing the Finance Act every year, it is necessary to prepare a unified code of laws and pass it through the House instead. This will reduce the arbitrariness implemented through the annual budget and maintain policy stability. Investment will be encouraged as the business facilities provided by various laws will be guaranteed.
Similarly, more than 600 billion rupees of investable money has been accumulated in Nepal’s banking system for the past 6 months. Interest rates have decreased by three percentage points in three months. However, there is no demand for investment. The working capital loan guidance introduced by the central bank 2 years ago is the first policy to discourage loans. This was and is necessary. It needs to be revised when there is disappointment in the market. The guidance should be postponed for at least 2 years or made easier so that the bank and the borrower can decide on it themselves.
Facility such as refinancing should be provided to small and medium entrepreneurs for easy flow of funds due to problems in cooperatives and microfinance. Remittances are the lifeline of the Nepali economy. It is equally important to increase tourism and exports to meet the reduced demand in the Nepali market.
In the case of exports, policies and programs should be immediately introduced to export Nepali agricultural products and water to the Gulf countries. About 12 flights from Nepal go to the Middle East daily. Cold storage, X-ray machines, and warehouse facilities should be provided at the airport to send Nepali products on these ships.
A loan of up to Rs. 10 million should be provided as collateral for the project, with entrepreneurs, the Credit Guarantee Corporation, the government, and development partners also bearing the risk. The Federation of Nepalese Chambers of Commerce and Industry has studied this.
Similarly, the Federation has also suggested providing facilities to entrepreneurs under the Start-up Nepal, Small Entrepreneur Development Program, and Technology-Based Prosperity Program.
The Federation has suggested that facilities can be provided to hotels, resorts, polytechnic institutes, other educational institutions, teaching hospitals, etc. established in hill stations near the Indian border to attract Indian tourists and other investments.
The Federation has also suggested making arrangements to provide electricity as raw material to industries and to stop the trend of load shedding in industries. .
Since extensive tax awareness, skilled manpower, systemic infrastructure, and other extensive administrative arrangements are required to move to a multi-rate VAT system, a task force including the private sector should be formed to make the necessary preparations for it and work should be started immediately. The Federation has submitted a suggestion to start implementing the reduced rate as a pilot on some goods and services that are having difficulty operating due to the single rate of VAT from the budget for FY 2082-83.
The tax levied on production-oriented industries should be gradually reduced by 5 percentage points in 5 years. Similarly, the federation has also drawn the government’s attention to reducing the income tax rate and increasing the tax exemption limit.
The federation suggests that measures to promote domestic industries are necessary, taking into account the impact of SAFTA on domestic industries. The federation is continuously collecting suggestions from its members to boost the sluggish economy and will discuss with the government accordingly.
