KATHMANDU: The Nepal Chamber of Commerce has submitted a 33-point set of recommendations to Finance Minister Rameshwor Prasad Khanal, urging the government to ensure policy stability, good governance, security guarantees, and an investment-friendly environment.
During a meeting held on Sunday, the Chamber described the human and economic losses seen during the Gen-Z protests on September 8 and 9 as a “historic tragedy.”
It said the resulting social and political tensions had severely disrupted industries, businesses, and the overall economy.
According to the Chamber, attacks on business establishments, industries, and private properties have shaken investor confidence, weakened the investment climate, and made economic recovery even more challenging.
Reiterating that the government has failed to generate adequate employment opportunities, the Chamber pointed out that more than 2,800 youths are compelled to migrate abroad daily, a trend it characterized as a blow to Nepal’s development potential.
It argued that the Gen-Z generation’s demands for good governance, anti-corruption measures, and job creation should form the foundation of economic progress.
The Chamber stressed that the private sector’s most urgent need is a “credible guarantee of security.” It emphasized that the state must be able to provide equal protection to domestic investors, similar to global standards offered to international investors.
The recommendations also include immediate implementation of online systems at all customs offices, limiting Nepal’s customs duty to a maximum of 25 percent, especially following India’s recent GST rate cuts, and restructuring VAT into a two-tier or multi-tier system.
The Chamber said uncertainties in excise duties and practices such as retrospective tax assessments have pushed many industries to the brink of closure. It called for a complete rewrite of the Income Tax Act 2058, arguing that the law no longer aligns with Nepal’s digital and fintech-driven economy.
Concerns were also raised about insurance-sector provisions on bonuses and claims, and the legal complications created by transfer-pricing disputes.
Highlighting the ongoing crisis in the cooperative sector, the Chamber urged the government to take immediate steps to help millions of small entrepreneurs and depositors who are unable to access their savings. It also recommended the swift establishment of a real estate stabilization fund.
Additional recommendations include restructuring or rescheduling loans for entrepreneurs blacklisted due to financial distress, scrapping the current working capital loan guidelines, and ending political pressure in tax determinations.
The Chamber further criticized the halt in the government’s cash export subsidies, stating that even approved files have stalled. It called for reinstating the subsidy to support export growth and suggested using treasury bills if necessary to ensure payments.
Expressing concerns over the downturn in the real estate sector, it recommended loan rescheduling, recognition of self-declared income for individuals, and continued banking access even for those with negative balances.
For tourism recovery, the Chamber called for immediate measures such as temporary free-entry visas, full operation of the Pokhara and Bhairahawa international airports, and aggressive tourism promotion in India and China.
It also demanded a reduction in gold customs duty, arguing that the current rate of 10 percent in Nepal, compared to 6 percent in India, has encouraged smuggling. It urged the government to revise the rate and abolish the 2 percent luxury tax and the 13 percent tax on gems and jewelry.
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