News Roundup: Nepal's Government Gets Serious About Tax Collection

Roundup of Nepali Economic and Business News for Jan 12-13
By NepaliEconomy.com

Nepali government is getting serious about tax compliance given that only 20 percent of the population (or is that eligible taxpayers?) are paying taxes. It wants every taxpayer to get permanent account number (PAN) and is even threatening government employees of salary freeze if they don't comply. Aside from individual's taxes, the government is trying to find ways to get its fair share from real estate transactions especially when they change hands at below market price and when they are transferred as gifts. Taxes tend to be used as legal weapon against political opponents in less well-governed countries and I worry that it could be the case especially in politically volatile Nepal. However, if done well, it could be a boon for Nepal's economy.

Bee-keeping is the bright spot in Nepal's agribusiness landscape. About 1,000 tons of honey is produced in 2008/09 of which 70 percent is exported. The industry is looking for support (surprise?) from the government in the form sugar subsidy. Talking about exports, finance ministry is lobbying the parliament against the ban of exports of sand and stones to India from Terai plains and Chure-Bhawar region of Nepal. It is a relatively big business, Rs 860 million in the 8 bordering districts. The concern is mainly environmental but I am sure there are other ulterior motives.

As expected, the government is mulling over plans to raise import duties to help solve Balance of Payment crisis but NepaliEconomy.com believes that the more appropriate and effective approach is devaluation of NRs versus IRs.

The war of words between state-owned Nepal Telecom (NT) and its regulator Nepal Telecommunications Authority (NTA) continues over the latters' demand that NT give-up some of its frequency assets. Both sides make their points in jargon-filled language nobody can understand.

Surprise, suprise, load-shedding is set to increase from 51 hours a week to 63 hours a week from next week.

An interesting interview on the BBC Nepali Service with Mr Min Bahadur Gurung, the owner of Bhat-Bhateni Supermarket.