Two-tier VAT and customs rate reduction necessary to make economy competitive: NCC President Agrawal

Kathmandu. KATHMANDU: Chairman of Nepal Chamber of Commerce Kamlesh Kumar Agrawal has stressed the need of implementing two levels of Value Added Tax (VAT) to make Nepal’s economy competitive. He also stressed the need to reduce the existing high customs tariffs.

Agrawal said that the ratio of revenue to GDP in other South Asian countries is only 13 to 14 percent, but in Nepal, it has reached 19.9 percent. Stating that the economic policy was also unstable due to political instability for a long time in the past, he said that a strong government to be formed next should bring stability in economic policy.

He said that the economy has been very weak for the last 4 years due to the narrow monetary policy of the regulatory body. He, however, expressed satisfaction over some policy reforms carried out recently by the Nepal Rastra Bank in collaboration with the Finance Minister. Stating that more than 80 percent of the investment in the country’s economy is from the private sector, he clarified that the policy change would directly affect the private sector.

In view of this, he demanded that the practice of ‘Regulatory Impact Assessment’ should be started before implementing any policy and regulation from now on. Chairman Agrawal stressed on the need to bring investment-friendly policies to promote ‘weightless and borderless’ trade like tourism and information technology (IT) in the coming days.

Stating that the past retrospective tax policies had caused a lot of hardship to the private sector, the new audit system was not implemented effectively and the online evaluation system of the customs still had weaknesses, he said that all these problems should be resolved immediately to make the economy dynamic.