‘Budget is okay but the higher taxes are not’

Thursday, May 31st, 2018 | | Money

Businessmen, traders, importers and exporters in Province 2, one of the country’s key economic hubs, described Budget 2018-19 as being balanced, but they criticized the federal government for imposing heavy taxes and putting the squeeze on a limited number of taxpayers.

Secretary of the Birgunj Chamber of Commerce and Industry (BCCI) Madhav Rajpal said that providing loans of up to Rs1 million to returning migrant workers, offering a five-year income tax waiver to cottage and small industries and a seven-year waiver to industries operated by women and scrapping medical and education service taxes were positive aspects of the budget. However, increasing excise duty on iron and spices has hit businessmen hard, he said. Subodh Kumar Gupta, vice-president of the BCCI, hailed the priority given to infrastructure development and the tax discount given to exportable items like tea, garments and dairy products for five years.

“Other positive announcements in the budget are constructing five tunnel roads, attaining cent percent literacy within two years and according priority to the completion of the postal highway,” he said. “Overall, the budget has addressed the needs of ordinary people.”

However, Gupta criticized the government’s move to collect a large chunk of revenues from the private sector by imposing hefty taxes. “The budget is silent on making life easier for the private sector.” Gupta said that the private sector was also concerned by the government’s announcement to move stringently to collect taxes from them.

The budget is also silent on addressing the grievances of sick industries like rice mills and cement and other industries. “The government should have expanded the tax base instead of increasing taxes sharply,” said Gupta, adding that the government had not discussed the issue with the private sector before reaching the decision.

Entrepreneur Ashok Vaidya said that waiving loans of small farmers was a positive side of the budget. “However, the financial plan is still traditional and has not focused on strategies to attract foreign direct investment in the country.” While 13 sick cement factories in the Bara-Parsa region are close to collapse due to problems regarding clinker, the budget has remained silent on addressing their difficulties.

Ashok Kumar Temani, central executive member of the Federation of Nepalese Chambers of Commerce and Industry, said that requiring real estate transactions to be conducted only through licensed companies was a good side of the budget.

Similarly, the government has made some good moves by prioritizing tourism and infrastructure, he said. However, the budget has not talked much about commercialising the farm sector. The budget has not accorded priority to properly managing the country’s two big industrial corridors: Parsa-Bara and Sunsari-Morang. “We have been asking the government to manage these industrial corridors for a long time, but our pleas remain unheard.”