Rapid economic recovery prioritised in budget

The government has given high priority to rapid economic recovery efforts along with relief measures and concessions to tax payers due to the adverse situation resulting from the ongoing health and economic crisis while determining the revenue policy and tax rate for the next fiscal year.

Presenting the statement of income and expenditure for the coming fiscal year 2021/22, Finance Minister Bishnu Prasad Poudel announced tax exemption and concession for industries affected by the COVID-19 pandemic, promotion of domestic and external investment, and protection of domestic industries, trade facilitation, expansion of tax limit and mobilisation of additional revenue by controlling revenue leakage.

He also stated that the revenue system will be made more progressive, corruption-free, transparent, automated and predictable. Similarly, he said the objectives of revenue mobilisation is to increase the capability of the revenue administration, promotion of voluntary tax participation with maximum utilisation of information technology, and infrastructure development.

The finance minister said arrangements have been made for income tax concession of 90 per cent for tax payers with transactions of up to Rs 2 million, of 75 per cent for tax payers with annual transactions from Rs 2 million to Rs 5 million and of 50 per cent for tax payers with annual transactions of Rs 5 million to 10 million, calculated on the income of fiscal year 2020/21.

Similarly, an arrangement has been made for charging only one per cent income tax on the taxable income of hotels, travel, trekking, transport and aviation service, film industry and media houses highly affected by the COVID-19. The period of transferring the period of loss of business has been extended to 10 years.

Reduction of customs tariff, VAT and excise duty charged on the import, production and sale and distribution of life-saving medicines and medical goods such as oxygen, liquid oxygen, oxygen cylinder, oxygen concentrator, among others has been put in place till January, 2022.

The finance minister also shared on the occasion that the excise duty on the import of electric vehicles has been fully scrapped and customs duty has also been significantly reduced to promote the use of environment-friendly vehicles and to increase the domestic consumption of electricity.