KATHMANDU: Shattered by the coronavirus pandemic, the private sector awaits a positive and life-giving touch from the government via the forthcoming monetary policy.
This means that the private sector is ready to pay taxes provided that the government created a conducive environment for business, particularly transaction through cheques.
Rajesh Kazi Shrestha, President of Nepal Chamber of Commerce (NCC), sought the government, in specific, to address the grievances of the private sector in the forthcoming monetary policy to be introduced by the Nepal Rastra Bank soon.
“We have never said the private sector is not going to pay taxes. What needs to be done is to create an environment that is favorable to both sides,” Shrestha told Khabarhub.
Citing that there is not enough budget to rescue the economy hard hit by the COVID-19 pandemic, he demanded that the government should address such problems faced by the private sector.
Pondering at the fate of the economy and various aspects related to it, NCC President Shrestha stated that the private sectors have been working sincerely and believe that they have to pay the tax to the government.
“Even though entrepreneurs are still facing legal and practical problems, they have been paying taxes even by taking overdraft from the bank,” he said while raising the legal provisions related to cheque bounce, which he argued have some complications in the country adding that the government needs to ensure that the cheques, too, are accepted during this difficult time.
“Take for instance, when there is a cheque bounce in India, the issuer is blacklisted. When the cheque bounce recurs for more than 3 times, the government either cuts their electricity or water supply or even suspends their passports,” he said adding, “However, in Nepal’s case, the issue is different.”
Shrestha believes that there should be strict provisions for such entrepreneurs.
“Enforcing strict discipline against cheque bounce, everyone should be made to abide by regulations,” he said adding that cheques should be issued only if there is money in the account.
Addressing the VAT concerns of the entrepreneurs, Shrestha said there are some misunderstandings on the VAT debit.
“Importers and wholesalers give on credit. The credit
goes for 6-8 months; there is lockdown for 3 months now and the credit sale has not come back the return,” Shrestha revealed the complications related with the sale, “If we pay the VAT now, all money will be gone; hence we should grant us the chance to pay the VAT once the credit is paid back.”
He added that there is a complication related to the handling of bad debt.
“Not all the goods we sell on credit, reward with some returns, some vendors give up the trade, some others disappear, some more refuse to pay as well; we categorize it as bad debt, but we are made to pay for the bad debts,” Shrestha said adding, “In India, they don’t ask for VAT.”
According to him, most of the goods and materials are spoiled or damaged by the lockdown.
He wants the government to consider the complications related to the VAT returns and also expects the government to reduce the customs quota.
Similarly, the NCC chair has reminded the WTO principle which talks about the deduction of customs.
“India has reduced the corporate tax by 5%, we have asked the government to take similar action,” he added.
However, though shattered by the budget, he still expects facilitation through monetary policy.
“We expected the budget to address our concern, but the budget did not meet our expectation,” NCC Chairman Shrestha said in the statement, “Now monetary policy should encourage the private sector. At least, we hope so.”