Kathmandu, Oct. 15
Garment Association of Nepal (GAN) has urged the
government to reverse its decision to cut subsidies on exports.
The GAN has demanded the immediate reinstatement
of the cash incentive scheme for export promotion. The government has recently
scrapped the provisions for such subsidies, and the Department of Industry said
that it wouldn’t accept any application that is likely to create financial
liabilities for the government.
In a statement issued on Wednesday, the GAN warned
that this withdrawal of support will severely impact investment expansion,
production levels, national exports, and employment figures. The ready-made
garment sector is a long-standing leader in Nepal's trade with third countries,
and the Association stressed that these financial facilities are crucial for
survival.
“Given Nepal’s landlocked status and the high
cost of accessing sea routes compared to our neighbours, the cash incentive and
the refund of Value Added Tax (VAT) are what allow us to compete in global
markets,” read the statement.
According to it, the decision to halt new
applications for the cash incentive is certain to have a long-term negative
impact on export-oriented industries and will deprive Nepali businesses of the
opportunity to be competitive internationally.
In addition to restoring the incentives, GAN for
significant administrative reforms. It urged the government to make the VAT
refund process 'Paperless and Faceless' immediately.
It also requested the establishment of a
simplified process to grant ‘sick industry’ status to dormant export- and
employment-focused businesses willing to recommence operations, thereby
encouraging export growth.
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