KATHMANDU: Private sector organizations have raised concerns over the Rs 500,000 cash transaction limit, saying it is creating difficulties for business operations. The issue was highlighted during an event today marking International Customs Day.
Finance Minister Rameshore Prasad Khanal attended the program, where umbrella organizations of the private sector, including the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chamber of Commerce, called for revising the rule that requires transactions above Rs 500,000 to be conducted exclusively through banking channels.
FNCCI President Chandra Prasad Dhakal said the restriction is challenging for businesses, particularly in areas with limited access to banking facilities. He suggested that the measure may have been introduced due to international pressure on Nepal and the central bank to address issues related to the country’s grey-listing in anti-money laundering standards.
Dhakal sadi now is the right time for the government to amend economic policies to make the investment environment more business-friendly and promote the private sector. He also noted that the hotel and tourism sectors are not receiving the same benefits as other industries from the state.
Similarly, Nepal Chamber of Commerce President Kamalesh Kumar Agrawal stressed that customs administration is crucial for national economic growth and trade facilitation. He criticized certain penalty provisions in the current Customs Act as overly strict and impractical. Agrawal also called for maintaining a multi-rate system for Value Added Tax (VAT) and suggested facilitating customs processes for materials brought into Nepal for wedding events, highlighting the country’s potential as a wedding destination. He added that the rule requiring all transactions above Rs 500,000 to go through banking channels is problematic for businesses.
At the event, President of the Customs Agents Association, Prachin Kumar Thaew, highlighted the need for a transparent, technology-friendly customs system to curb illegal trade, boost economic growth, facilitate revenue collection, and support foreign trade.
Comment