Presenting its views on the budget, the NCC said it viewed the fiscal plan positively in general, noting that many of its recommendations had been incorporated into the government’s policies and programmes.
The Chamber welcomed the decision to maintain the personal income tax exemption threshold at Rs. 1 million and reduce the maximum income tax rate from 39 per cent to 29 per cent.
It also praised measures aimed at simplifying the tax system, including lower customs duties on 273 types of industrial raw materials compared to finished goods, a reduction in customs duty slabs, and the abolition of excise duties on 360 items.
According to the NCC, provisions exempting tax liability on involuntary ownership transfers following the death of a natural person, recognising capital gains tax on the sale of securities of listed companies as a final tax, forming a high-level recommendation committee to study a multi-rate Value Added Tax (VAT) system, and introducing a special concession scheme to resolve tax disputes were positive steps.
The Chamber expressed confidence that measures such as tax waivers and facilitation for resolving disputes pending in courts and judicial bodies, simplifying the company liquidation process, expanding double taxation avoidance agreements, and promoting angel investment, venture capital and private equity funds would help improve the investment climate.
It also highlighted as long-term initiatives the facilitation of overseas investment for Nepali citizens, allowing non-resident Nepalis to participate in the secondary securities market, prioritising information technology and the digital economy, establishing an Artificial Intelligence (AI) computing centre, and permitting the private sector to trade electricity in international markets.
The NCC said proposals to review electricity tariffs and demand charges to improve industrial competitiveness, provide business recovery loans, address contractors’ problems, and establish a National Asset Management Company to manage non-performing loans could contribute to reviving economic activities.
Similarly, the Chamber welcomed measures such as a 50 per cent tax exemption on IT service exports, full tax exemption on sweat equity, grants for farmers making initial investments in agriculture and livestock production, shorter timelines for revised tax assessments, and further automation of the VAT system.
It noted that recognising Corporate Social Responsibility (CSR) expenses for tax purposes had long been a key demand of the private sector.
It said the decision to impose a 3 per cent tax on services provided by privately operated educational and health institutions, levy a 5 per cent VAT on electricity consumers using more than 50 units per month, and raise the capital gains tax rate could increase the burden on investors.
The Chamber also expressed concern over the increase in customs duty on gold and silver from 10 percent to 20 percent, an additional 0.5 per cent luxury and promotion fee, and higher taxes and duties on electric vehicles, warning that such measures could negatively impact efforts to promote clean energy and green transportation.
