'Government apathetic to private sector's demands'

Kathmandu, Sept. 13

Private sector entrepreneurs have said that the government had largely remained apathetic to their valid demands.

"We have been demanding the same things for the last one decade but there has not been business and trade facilitation that would promote investment and entrepreneurship," they said at an interaction of Nepal Revenue Advisory Board (NRAB) with the Nepal Foreign Trade Association (NFTA) and Nepal Trans-Himalaya Border Commerce Association (NTBCA) on foreign trade on Tuesday.

Binod Sethia, President of NFTA, said that their job has been making rounds of the government agencies, including the ministry, to make requests to open the border and facilitate the trade.

Since 2015 Earthquake, border with China has not been smooth but there has not been any concrete initiatives to facilitate the cross-border movement of goods, and especially in the wake of the COVID-19 pandemic, China has been adopting 'zero COVID' policy and shutting border since then although a small number of consignment is passing the border to reach Nepal.

Likewise, commenting on the government move to banning imports of some goods and maintaining cash margins up to 100 per cent while importing luxury goods, he said that increasing duty or non-tariff barriers would have been better options rather than maintaining cash margins against every Letter of Credit (LC) opening.

Increase in import is the result of the increase price of goods including the major imports like petroleum products, steel and agricultural produces, Sethia maintained.

He also demanded that the banks should give them interest on our LC deposits, they can't use the money free of cost.

In order to create conducive environment for investment and trade, country credit rating should be done immediately as it will help us in foreign trade – both imports and exports. Credibility of banks and traders also goes up, Sethia said.  

According to him, it is not easy to get the incentives on export. "It is very difficult to claim export incentives while the government is yet to formulate working procedure to get incentives on products like cement and shoes that was announced about three and a half months ago," he said.

Ram Chandra Parajuli, Secretary of NTBCA, suggested the government to fully activate the one-door system for business registration and facilitation.

He also said that the northern-border has become highly complex to conduct trade, and traders are forced to send their goods via air cargo.

Likewise, he suggested to charge all tax on the source, it will make the tax administration easy and effective.

Businessmen had also suggested differentiating customs rate for seasonal agricultural products such as apples. It's a practical suggestion, said Mahesh Prasad Dahal, Chairman of NRAB.

He said that the board is currently holding discussions with the private sector entrepreneurs with the target of completing it by mid-January 2023 so that it could submit the suggestions to the government for the next year's planning.

According to him, duplication of taxation among various levels of the government is still an issue that needs to be addressed.

Lekhnath Sharma Pangeni, Member of NRAB, said that in the context of Rs. 1.72 trillion trade loss in the last fiscal year 2021/22, there is an urgent need to rethink the model and style of business and trade currently going on.

Policy coordination among the government agencies as well as inter-agency offices and departments is lacking which has negatively impacted business and investment, he said.

"The board will increase the dialogue with the private sector entrepreneurs in order to offer more facilitation to 'doing business' environment in the country," said Pangeni.

Similarly, Bhumiram Sharma, Member-Secretary of NRAB, said that the board had suggested to levy income tax on foreigners working in Nepal, people working in diplomatic missions, and high-income groups like doctors, engineers and lawyers.

Director of the Department of Customs, Mani Ram Paudel, said that Nepali entrepreneurs have been suffering due to China's zero-COVID policy which has affected the trade with the northern neighbour. However, he claimed that the concerned government agencies had put their efforts for the cross-border movement of goods. 

 Published in The Rising Nepal daily on 14 September 2022.