Kathmandu. KATHMANDU: Nepal Chamber of Commerce (NCC) has expressed the belief that country’s economy would pick up momentum if the budget for the fiscal year 2083/84 is implemented. Issuing a press release today, the Chamber of Commerce said that although the budget seems somewhat ambitious, its effective implementation will help accelerate the economy.

The Chamber has said that the policy of exemption in income tax and encouragement of industry is a positive aspect of the budget. Raising the limit of personal income tax exemption to Rs 1 million and reducing the maximum rate from 39 per cent to 29 per cent is considered a major achievement.

According to the Chamber, the decision to maintain lower customs duty on 273 types of industrial raw materials than the finished goods and to scrap the excise duty on 360 items would provide relief to the manufacturing industries. The budget has also given priority to the information technology sector, 50% tax exemption on service export and the plan to establish an AI computing center to usher Nepal into the AI age.

The NCC has praised the announcement of allowing the private sector to trade electricity in the international market and establishing a national asset management company for bad debt management. The Chamber believes that the announcement of capital gains tax on the sale of shares of listed companies as the final tax and the entry of Non-Resident Nepalese in the secondary market will have a positive impact on the share market.

“Despite some positive aspects in the budget, some provisions will cause problems to the private sector and the general consumers,” the NCC said in a statement. According to the NCC, the policy of imposing three percent tax on the services provided by the private sector educational and health institutions is not an effective step.

Consumers consuming more than 50 units of electricity per month will have to pay 5 percent VAT in the bill and the additional tax on electric vehicles will discourage the green energy campaign. According to the NCC, increasing the customs duty on gold and silver from 10 per cent to 20 per cent and increasing the rate of capital gains tax would lower the morale of the investors.

NCC President Kamalesh Kumar Agrawal said the budget would contribute to the promotion of investment, simplification of tax system and industrial development. “If these provisions are implemented firmly, the morale of the private sector will be boosted and the overall economic activities will expand,” he said.