Kamlesh Kumar Agrawal on the Upcoming Fiscal Year Budget

Kathmandu. Kamlesh Kumar Agrawal, President of the Nepal Chamber of Commerce, has expressed confidence that the budget for the upcoming fiscal year will revitalize the economy, which has been sluggish for a long time.

Speaking at an interaction program on the budget organized by the Nepal Economic Journalists Association (NAFIJ) on Monday, President Agrawal stated that the budget has made remarkable progress in the area of tax reform. According to him, tax reform issues that had been halted for a long time have been addressed through the budget.

He said, "It will revitalize the long-sluggish economy. It appears to have been presented as a starting point to give a new dimension to the country's economy and enter a new era of economic prosperity. Issues regarding tax reform had been stalled for a long time. This time, the budget has made a big leap in tax reform. Huge relief has been provided in personal income tax. For those with an annual income of up to 1 million, we were stuck for many years within the tax exemption limit of 500,000 and 600,000. Because of that, a transparent economy could not begin. This time, our demand was to start from 1 million, which the Honorable Minister has reflected in the budget."

President Agrawal termed the government's move toward implementing a multi-rate Value Added Tax (VAT) system as a courageous decision.

However, he expressed dissatisfaction over the imposition of a 5 percent VAT on electricity tariffs.

He said, "The government has initiated a multi-rate VAT system by imposing a 5 percent value-added tax on electricity and ride-sharing. Nepal is a country with immense potential for water resources, and while its production needs to be increased, the tax aspect did not seem right. It is also necessary to form a high-level committee to study the relevance of multi-rate VAT and submit reforms." 

He expressed belief that if necessary legal amendments are made, the confusion and illusions regarding capital gains tax will automatically disappear.