Kathmandu. The Confederation of Nepalese Industries (CNI) has announced the budget for the fiscal year 2083/84 BS. Swarnim Wagle has submitted a suggestion.

The CNI has urged the government to take the private sector as the engine of development to increase industry and investment.

Presenting the suggestion on behalf of the CNI, President Birendra Raj Pandey said that the budget should be brought in a way to support income generation and wealth creation.He said the suggestions presented for the budget for 2083/84 BS would significantly contribute to the country’s journey towards prosperity with significant improvement in economic expansion, employment generation and investment growth.

The budget has been recommended on industry and investment, foreign direct investment, tax policy and system, customs, tourism, agriculture, medicinal herbs and forest products, energy, information technology sector, banking and finance, insurance, cooperatives and capital market, domestic production promotion, infrastructure, health and education, non-tax, revenue leakage and money laundering.

It has urged the government to make policy reforms by prioritizing industries, ensure the stability of such policies for at least 10 years, formulate and implement a commodity-centric industrial development strategy with competitive potential, and bring the budget keeping employment, production and import substitution at the centre. The federation has suggested to differentiate at least two levels of customs rate on raw materials and finished goods, to implement a system of refund or adjustment system including customs duty on industrial raw materials, and to encourage domestic production through tax exemption on the import of remaining raw materials to industries using at least 40 percent domestic raw materials.

Likewise, the government has also urged the government to make the tax system simple, integrated and limited, clarify the tax on VAT, income tax and excise duty with necessary explanatory notes and reduce the income tax rate to a minimum limit of Rs 10 lakh.

The FNCCI has suggested implementing a risk-based audit system, tax dispute resolution, advance ruling and digitization of tax administration. Coordination among the bodies to control smuggling should be strengthened, minimum standards should be enforced for imported goods, Nepal Bureau of Standards and Metrology and Accreditation Center should be strengthened, testing, certification and labs should be made of international standard, NS and ISI should start talks with India for mutual understanding on mutual verification process and standards ।

To give priority to domestic goods in public procurement, to implement domestic product identification and procurement system through digital portal, to simplify policies for sustainable use of natural resources, to implement subsidy system based on production, employment and export, to simplify tax laws, to make tax laws simpler, clear and investment-friendly, to remove double taxation of section 57 and 95A of the Income Tax Act, to implement a provision that creates civil liability in financial offenses, It has also suggested that the government should make necessary arrangements with clear provisions including the provision of providing tax concessions at the province and local level to the productive industries, repealing the Act to Ban Foreign Investment, 2021 and allowing them to invest in foreign countries.

The committee has also suggested bringing a policy to attract the private sector in large infrastructure projects, not to impose a ceiling on the required land as per the approved projects of the industry, to implement a policy to mortgage the surplus land and to sell it to the industry, to adjust the amount that the industry has to pay to any government agency and the amount that the government has to pay or return to the industry.

Accepting the CNI suggestion, Finance Minister Wagle said that the capital of the private sector was necessary for the development. He stressed the need of legal reform and reform in the tax system, adding that the issue of wealth acquisition should be looked into. The government is clear that development is not possible without investment from the private sector, he said, urging the private sector to invest in infrastructure.