VAT on some basic commodities to goThe government plans to lift value added tax (VAT) on some basic commodities through the budget statement scheduled for May 29 as part of its plan to introduce an ‘industrial promotion’ financial plan, the Finance Ministry said on Sunday.
The government plans to lift value added tax (VAT) on some basic commodities through the budget statement scheduled for May 29 as part of its plan to introduce an ‘industrial promotion’ financial plan, the Finance Ministry said on Sunday.
Revenue Secretary Rajan Khanal said that a budget allocation would be made for the expansion of Biratnagar Airport into a regional airport. Likewise, the government will set aside funds for the construction of oil storage plants to hold enough fuel
to last at least five months, he said.
“The fuel storage facility across the country is part of the government’s plan to maintain stocks of petroleum products to meet the country’s demand for at least five months.”
The government came up with the plan after the country faced an acute oil shortage following an Indian trade embargo of more than four and a half months from September 2015 to February 2016.
Currently, Nepal Oil Corporation, the sole supplier of petroleum products in Nepal, has storage facilities at 10 locations. These storage plants can hold stocks of 71,622 kilolitres of petrol, diesel, kerosene and aviation fuel. The quantity is sufficient to meet the country’s requirement for only 20 days.
Khanal said that the government would reduce the customs duty on cotton fabrics. The duty was increased from 5 percent to 15 percent two years ago.
“We are also planning to help jute mills by waiving certain electricity tariff,” he said. Special subsidies will be provided for solar-powered irrigation systems.
Likewise, the government will phase out state-owned National Trading Limited in the next fiscal year, said Khanal. “Overall, the next fiscal year’s budget will be focused on industrial promotion,” he said, adding that the budget would be able to garner ownership from all sections. Meanwhile, Finance Minister Krishna Bahadur Mahara said that the budget the government was planning to unveil soon would be a productive one. “It will not be a traditional budget that the government has been issuing every year.”
He added that although capital expenditure had increased this fiscal year, the performance was still not satisfactory. “During the same period (mid-March) in the last fiscal year, capital expenditure was recorded at 9 percent, which has increased to 20 percent this fiscal year. We still have not been able to change the habit of spending the budget towards the end of the fiscal year,” he said.
The budget will be announced on May 29 and it will be implemented from May 30, he added. “The government will review all technical and legal hurdles that have been constantly delaying effective implementation of the budget.”