Former Finance Minister Khatiwada Advises Against Raising Minimum Income Tax Threshold in Budget

Former Finance Minister Dr. Yubaraj Khatiwada has recommended not increasing the minimum income tax threshold in the upcoming budget. He presented this suggestion during a discussion with former finance ministers held by Finance Minister Dr. Swarnim Wagle for the formulation of the fiscal year 2078/84 budget. Dr. Khatiwada proposed maintaining the revenue growth target between 10 to 12 percent and advised against raising it up to 15 percent. He stated, “Even if revenue surpasses NPR 12 trillion, the likelihood of reaching NPR 13 trillion is low.”

Dr. Khatiwada suggested that the budget size should be around NPR 20.5 trillion, emphasizing that the revenue target should not be overly ambitious. He also recommended reducing excise duty and advised against implementing a two-tier Value Added Tax (VAT) structure. Highlighting the decline in agricultural contributions in the Madhesh region, he urged for proper attention to this issue.

He noted that there should be no problems regarding health insurance and stressed the necessity for subsidies in the agriculture sector. Referring to past discrepancies in national pride projects, he advised rectifying such mismanagement. He added, “Arresting only two or four individuals will not resolve the problem.” To improve the financial sector, he recommended continuous coordination with the central bank.