KATHMANDU: Stakeholders have voiced their concerns, urging the government to maintain a consistent taxation policy to bolster investor confidence in the economy. The recent budget announcement for fiscal year 2024/25 has stirred controversy by revising taxes on various items, including essential foods and industrial raw materials.
Lawmaker Gagan Thapa emphasized the need for a stable taxation policy spanning at least a decade, highlighting that taxes should not be subject to ad hoc decisions but rather implemented after thorough analysis. He cautioned that arbitrary tax changes could raise suspicions regarding the government's intentions.
The budget introduced several tax amendments, such as imposing a 10 percent advance income tax on pulses and legumes imports, a 2.5 percent advance income tax on imported paddy, and doubling customs duty on raw materials for steel manufacturing. Additionally, taxes on electric vehicles (EVs) were raised by 20 percent, deviating from the previous administration's approach of imposing low import taxes on EVs.
Chandra Prasad Dhakal, president of the Federation of Nepalese Chambers of Commerce and Industry, expressed concern over the uncertainties created by changes in income tax, customs duty, excise duty, and value-added tax. He stressed that such policy inconsistencies not only affect entrepreneurs but also undermine the country's credibility in the international market. Dhakal warned of potential revenue setbacks if tax rates are altered frequently, urging the government to conduct comprehensive studies on the repercussions before implementing tax revisions.
