Finance Minister, YubaRaj Khatiwada, on May 29 presented the annual budget for the coming fiscal year 2075/76. The budget plan, this year is of Rs.1.532 Trillion. It also aims to implement various programs from last year.
Five key take-away for all of the ambitious youths and Nepalese people from yesterday’s budget presentation are:
Nepal expects to see a running railway soon with huge budget allocation of 7.7 billion:
The Government of Nepal has decided to prioritize railway development in the upcoming year. It has allocated Rs.7.7 billion for the project. One major railway project that the government is looking forward to, is the railway connection between Nepal and China.
it will ease out business between Nepal and China. Thus, improving diplomatic relations.
The government will celebrate visit Nepal 2020 with a budget allocation of Rs. 22.68 billion:
Keeping in mind the goal of Nepal to bring in 2 million foreign tourists yearly from 2020, the finance minister has allocated 22.68 billion of total budget for promotion of tourism. The government will promote two major aspects of tourism: domestic tourism and adventure tourism.
This will likely attract a large number of tourists in the country.
Exclusive cashbacks and VAT rebate policies to reduce VAT evasion:
In order to promote electronic payment system and transactions under VAT regime, the government has announced that 10% of the amount paid will be sent as cash-back to payer’s account. In case, the payment is made electronically. Whereas, earlier, the entrepreneurs had to wait for months to get a VAT refund. After new budget, the entrepreneurs will be able to get a VAT refund in the time period of 4 months.
The government looks forward to reducing leakages in VAT payment system. So, it wants to promote digital payment for VAT.
Increased tax slab for the salary earners:
The tax slab is increased for salary earners. In the upcoming year, single person earning up to Rs. 33,333 per month i.e. up to Rs.4, 00,000 per annum will not have to file for tax. Likewise, in case of married people, married couples earning up-to Rs. 37,500 per month and up-to Rs. 4, 50,000 per annum will not have to file for tax. Both couples and individuals will have to pay social security tax of 1%.
Capital Market expected to become more lucrative with the reduction in capital gain tax:
There are two major changes in the capital market with the announcement of budget. The capital gain tax has been reduced to 5% from 2.5% for individuals.Whereas, the tax rate remains the same for institutions at 10%. Likewise, the tax calculation on bonus and right share is now based on weighted average method. it is a change from the past method of individual scrip base.
Like the past years this year’s budget plan too has made some new development plans. Budget plans from previous years will also be implemented. For now, this year’s budget seems promising. Especially, on the five above mentioned plans.