Nepal has declared it’s budget for the upcoming fiscal year and it sought to impose some remedy to the industrial sector due to Covid-19 crisis. However, the overall tax system of Nepal merely reflecting one of the highest tax collectors in the world. And in comparison to tax revenue, there are no futurist development projects has been carried out by the government.
Dr. Yub Raj Khatiwada Minister of Finance of Nepal has declared that it would be eligible for income tax exemptions from 25% to 75% in the next financial year for 2020-21, at a joint parliamentary conference. Moreover, the Government has increased excise duty in imported house appliances like the furniture to promote local furniture business.
But, government has already imposed up to 75% in income tax, so directly or indirectly, small businesses are suffering from the government new tax system. According to the new budget for the upcoming 2020-21 fiscal year, for those whose annual turnover ranges between Rs 2 Million to Rs 50 Million, they are eligible for tax exemption up to 25%. Similarly, in the following fiscal year, the tourism industry is entitled to a 20 % tax exemption.
The Statement, cooperatives working in rural regions do not longer have to pay income tax. However, organizations operating in metropolitan towns will have to pay 5%, 7%, and 10% respectively of income tax. Moreover, the crucial health sector and import duty on the raw material of the domestic pharmaceutical industry has got some relief though.
Furthermore, one of the most controversial industrial sector like Tobacco products, including tobacco, gutka, cigars, and pan-masala, have been eventually getting no changed even this year. The high tax on these industries will be conhtinued, and it will be based on the trend of proceedings tax system. Additionally, there is no change in taxes for alcohol too.
Eventually, there will be the same tax to account for the impact of Covid-19 on aviation fuel and cooking gas industry. But on gold and jewelry, the customs duty in these items has drastically increased as well as government has also increased tariff on electronic appliances too.