Budget should support income generation: CNI

 Budget of Fiscal Year 2026/27

 

Kathmandu, May 10

The Confederation of Nepalese Industries (CNI) urged the government to adopt policies that treat the private sector as an engine of development and promote industrial and investment growth.

Submitting its recommendations for the upcoming budget of fiscal year 2026/26 to Finance Minister Dr. Swarnim Wagle at his office on Sunday, it said that the budget should support income generation and wealth creation.

The CNI urged the government to prioritise industry through policy reforms and ensure policy stability for at least 10 years. It also recommended implementing an industrial development strategy focused on products with competitive potential and introducing a budget centred on employment, production and import substitution.

It further suggested maintaining at least a two-tier customs duty difference between raw materials and finished goods, introducing a net settlement system for refunds or adjustments of customs duties and other refundable amounts on industrial raw materials, and promoting domestic production through tax exemptions on imported raw materials for industries using at least 40 per cent domestic raw materials.

The confederation has submitted sector-specific budget recommendations relating to industry and investment, foreign direct investment, tax policy and systems, customs, tourism, agriculture, herbs and forest products, energy and information technology, infrastructure, fiscal governance, finance and promotion of domestic production.

Similarly, CNI called for making the tax system simpler, integrated and limited in type, while clarifying VAT, income tax and excise duty provisions through explanatory notes. It also proposed reducing income tax rates and increasing the minimum threshold for personal income tax for individuals to Rs. 1 million.

The private sector business body suggested implementing a risk-based audit system, digitising tax administration, and introducing mechanisms for tax dispute resolution and advance rulings.

It further proposed upgrading testing, certification and laboratories to international standards and initiating negotiations with India for mutual recognition of certification systems and standards such as NS and ISI.

"Priority should be given to domestic products in public procurement, a digital portal should be introduced for identifying and procuring domestic products, policies for the sustainable use of natural resources should be simplified, and subsidy systems based on production, employment and exports should be implemented," read the statement.

CNI additionally suggested repealing the Foreign Investment Restriction Act, 2021, which prohibits overseas investment, and introducing clear provisions governing approval procedures and regulation for investments abroad.

"We recommended adopting policies to attract private-sector participation in large infrastructure projects and removing land ceiling restrictions for land required under approved industrial projects," said CNI.

Presenting the recommendations, CNI President Birendra Raj Pandey expressed confidence that addressing and implementing the recommendations put forward for the upcoming budget would significantly improve economic expansion, employment generation and investment growth, thereby contributing meaningfully to the country’s prosperity.

Responding to the recommendations, Finance Minister Dr. Wagle said private-sector capital is essential for development. He said that legal reforms and improvements to the tax system are necessary and emphasised the importance of recognising wealth creation. He added that private investment should be encouraged in infrastructure development.

The meeting was attended by former CNI President Rajesh Kumar Agrawal, former presidents Hari Bhakta Sharma and Vishnu Kumar Agrawal, Senior Vice-President Nirvana Chaudhary, Vice-Presidents Hem Raj Dhakal, Bhim Ghimire and Gokul Bhandari, and other office bearers.

Published in The Rising Nepal daily on 11 May 2026.