Kathmandu. Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel has said that Nepal is currently on the grey list of the Financial Action Task Force (FATF) on money laundering and luxury tax has to be imposed on jewellery including gold and silver to remove the country from the intensive watch list.

Responding to questions raised in the National Assembly on the Appropriation Bill- 2082 BS, Finance Minister Poudel stressed the need to make the transaction of gold and silver and jewellery transactions transparent to bring Nepal out of the ‘grey list’. Through the budget for the upcoming fiscal year, the government had decided to impose luxury tax on the purchase of all types of jewelry and gold and silver.

“Earlier, a luxury tax of 2 per cent was levied on transactions above Rs 10 lakh. Finance Minister Poudel said, “We needed to make gold trading transparent in order to get out of the FATF’s intensive watch list in money laundering cases.” Visasita fee has been imposed so that there is purity in the transaction of goods including gold and money laundering money is not invested there. He also expressed the belief that discussions were being held with the gold and silver traders who were protesting against the luxury tax and a meaningful conclusion would be reached soon.

Similarly, Finance Minister Poudel claimed that the budget for the upcoming fiscal year is implementable. He said that while ensuring the source of the budget, a realistic analysis of internal revenue system, loans and grant titles has been done. Arguing that it was not bad to bring deficit budget to meet the aspirations of development and prosperity, Finance Minister Poudel claimed that the policy of spending loans in the capital formation sector has been taken. “Revenue is an important source when we propose the budget. It has been estimated in a realistic way. The analysis of internal and external loans and grants is also correct,” Minister Poudel said in the National Assembly. We have stressed the need to spend the loan to increase production and productivity. He also said that the budget for the upcoming fiscal year has been proposed within the limits of internal debt given by the National Natural Resources and Finance Commission. Finance Minister Poudel claimed that the government has worked in a way to increase the revenue base and adopt a stable policy on rates and make it predictable. He said that he is hopeful that the revenue target can be achieved by controlling leakage and using modern technology.