The Nepal Chamber of Commerce has welcomed the new budget, highlighting the increase in the personal income tax threshold and reduction in tax rates as positive measures. The chamber also praised the reduction of customs duties on industrial raw materials and the abolition of excise duties on 360 items. However, it expressed disagreement with the increase in taxes on private educational and health institutions, as well as the hike in customs duties on electric vehicles and gold and silver imports. Kathmandu, 17 Jestha.
The Nepal Chamber of Commerce commented that, overall, the budget for fiscal year 2083/84 is somewhat ambitious, but with effective implementation, the economy could gain the expected momentum. The chamber welcomed the decision to maintain the personal income tax exemption limit at NPR 1 million and to reduce the maximum income tax rate from 39 percent to 29 percent.
The chamber explained that setting lower customs duty rates on 273 types of industrial raw materials compared to finished goods, reducing tiers of customs rates, and abolishing excise duties on 360 items are important steps to simplify the tax system. The budget’s provision exempting involuntary ownership transfers after the death of natural persons from tax, and recognizing capital gains tax on securities of listed companies as final tax, were also viewed positively by the chamber.
Nonetheless, the chamber noted that some budget provisions pose challenges for the private sector. Imposing a 3 percent tax on services provided by private-run educational and health institutions, along with additional taxes and increased fees on electric vehicles, may adversely affect the promotion of clean energy and green transportation. The chamber expressed the expectation that if these positive budget initiatives are implemented effectively, it will significantly contribute to investment promotion, boosting private sector morale, simplifying the tax system, enhancing competitiveness of industries and businesses, and overall economic expansion.
