Kathmandu Jan 15-Minister of State for Finance Dr Roop Jyoti released on Saturday the Finance Ordinance 2006 promulgated by His Majesty King Gyanendra.
The new ordinance, which comes into effect from on saturday, is a continuation of the previous finance ordinance and no changes have been made in the expected figures. The ordinance will stay in effect for the next six months.
Though the ministry has claimed that the massive reduction in excise duty and customs duty in the ordinance will have positive impact on the overall economy of the country, its implementation part is challenging, business community says.
The government had announced an estimated budget of Rs 113 billion for the fiscal year 2005/06, out of which Rs 88 billion was expected to be collected from revenue. Giving continuity to the programmes featured in the initial budget for this fiscal year, the newly promulgated ordinance has made some changes in structure of tax administration. The initial budget announced on July 16, 2005 has supported the royal move of February 1, along with the 21-point programme of the government and poverty alleviation aim as mentioned in the 10th five-year plan.
The new Finance Ordinance has focused on Value Added Tax (VAT) as the main source of revenue, with some reforms on revenue policy keeping in view the membership of Nepal in the World Trade Organisation and BIMSTEC, and the recently introduced South Asia Free Trade Area Agreement.
State Minister Roop Jyoti expressed belief that the extension in the VAT region would encourage fair and transparent financial transactions. He claimed that special provisions have been made in the ordinance for corruption control, development of private sectors and promotion of domestic industries with the participation of consumers in economic activities.
The state minister announced that 16 policy-level reforms were made in the ordinance while 19 in VAT and excise duty, 4 in income tax, 13 in customs duty and 15 in the miscellaneous heading.
“The changes in revenue policy will establish transparency in business, encourage tax paying and make revenue administration efficient,” State Minister Roop Jyoti said, claiming that it would render positive impact on overall economy of the country.
Mainwhile The business community of the country gave mixed reaction on the newly promulgated Finance Ordinance-2006. They doubted the implementation part of the ordinance while taking it in a positive light on macro-perspective.
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