FNCCI appreciates budget’s commitment to reforms

Kathmandu, Jun. 8

Appreciating the recognition of the private sector as a key economic driver and its commitment to economic reform in the budget for the upcoming fiscal year 2025/26 as a positive step, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) welcomed it.

Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel presented a budget of Rs. 1.964 trillion on May 29.

“The budget has addressed several long-standing recommendations by FNCCI, including a commitment to policy stability and a halt to retroactive laws,” read a statement issued by the FNCCI on Saturaday.

It particularly appreciated the government’s plan to introduce a one-door system for business registration and closure, although it recommended leveraging digital platforms like the Nagarik App to increase efficiency.

“Promised reforms in laws related to public-private partnerships (PPPs), investment promotion, and Environmental Impact Assessment (EIA)/Initial Environmental Examination (IEE) processes are crucial to attracting investment,” said the FNCCI.

It also appreciated the measures such as granting IT and hospitality industries special industry status, reducing SEZ lease rates, and providing SEZ-like benefits to export-oriented firms stating that they are expected to boost productivity.

According to the FNCCI, it supports initiatives like establishing startup incubation centres in collaboration with the government and universities, providing income tax exemptions for startups with turnover up to Rs. 100 million, and encouraging innovation through incentives. It also lauds simplified procedures for SMEs and efforts to promote the domestic timber industry.

Provisions for supporting women entrepreneurs and returning migrant youth are considered promising, although FNCCI suggests allowing dependent family members of formal remittance senders to access business opportunities.

However, FNCCI remains concerned over unaddressed issues, including excise duties on domestic production, high TDS on exports, and unchanged VAT on air tickets, which may hamper tourism and trade.

It has also called for clear guidelines on foreign investment by exporters and urges for an urgent reform of laws related to credit recovery and asset management.

Published in The Rising Nepal daily on 9 June 2025.