Highlights on Nepal Budget 2074/75 Budget summary Budget allocation Sources of Budget Financing Major highlights of Finance Bill

June 9, 2018 | Author: Rupak Sinjali | Category: Documents



Rupak Sinjali BEL/071/234

Highlights on Nepal Budget 2074/75 The Government of Nepal has launched budget of Rs 1,279 billion for the fiscal year 2074/75 (2017/18). Of this fund, Rs 803.5 billion has been Rs 335.2 billion for capital expenditure and Rs 140.3 billion for financing provision.

Budget summary Budget allocation Re-current expenditure Capital expenditure Financial management Total budget allocated

803 Billions 335 Billions 140 Billions 1279 Billions

62.83% 26.21% 10.97% 100%

Sources of Budget Financing Head Revenue Repayment of debt principal Foreign grant Foreign loan Internal loan Cash reserve of fiscal year 2073/74 Total

Amount in Billion 730.05 15.00 72.17 214.04 145.00 102.73 1279.00

Major highlights of Finance Bill •

Allocated the amount of Rs. 146.18 billion for the post-earthquake reconstruction and rehabilitation programs.

Personal housing grant to earthquake victims increased to 4lakhs.

Inflation rate is estimated to be lower than 6%.

Long standing impasse in the construction process of Kathmandu Terai Madhesh Fast Track, has been initiated. For this, Rs. 10.14 billion has been allocated.

Agriculture contributes about 30 percent in the GDP of Nepal and is the major profession of most of the Nepalese. Therefore, continuation to the provision of 5 percent subsidy in the interest of agriculture and livestock loan is given. All sorts of subsidies provided to agriculture will be managed through farmers own bank account.

Concessional loan will be provided to the people who are under the poverty line.

Continuity will be given to the social security allowances provided to the citizens like senior citizen, single woman, disadvantaged groups ( dalits), endangered indigenous people/ ethnic groups, helpless and physically challenged people. Allocation of 36 billion for this purpose.

Necessary arrangement will be made to open at least one branch of commercial banks in each rural municipalities and municipalities.

Contributory pension system will be implemented for all public servants receiving remuneration from state treasury, including civil servants, teachers, Nepal police, armed police.

Framework of Health security plan will be developed for the contributors of Employer’s Provident Fund by covering such expenses from the portion of interest accrued from their contributions.

The process of double taxation avoidance agreement will be expedited with those countries having much more transactions and having potentials of investment and technology export with Nepal.

An arrangement will be made in a way that Importer and exporter will be allowed to import and export for business purpose only after getting import export code.

Expected an economic growth of 7.2 percent through the implementation of this budget.

Health insurance to all people within 3 years.

Newly appointed government employee shall have to contribute towards retirement while drawing salary from 1st shrawan 2074.Goverment shall also contribute for the same fund.

Individuals going abroad need to open bank account compulsorily for remittance purpose.

There is no any changes in the slab rates of income tax .The slab rates of previous year is to be continued. Moreover, there is no any changes in the corporate taxes as well.

No changes in the existing value added tax rate of 13 percent for the fiscal year 2074/75.

Objectives of Budget ➢ ➢ ➢ ➢

To support execution of the constitution. To attain sustainable, inclusive and high economic growth. To maintain macroeconomic stability. To enhance access of general public to the service provided by the state.

Budget priority ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢

Execution of Federalism, Reconstruction of infrastructures damaged by the earthquake, Increase employment opportunities, Increase in production and productivity, Speedy implementation of national pride projects, Agriculture modernization, commercialization, mechanization, Hydroelectric production, transmission, and distribution, Construction and improvement of road, railway, and international airports, Development and promotion of tourism infrastructures, Investment on education, health, drinking water and sanitation, Smooth operations and regulations of bank and financial institution, Enhance supply, storage and distribution of necessary consumable goods and Improvement of public administration and service delivery.

Corporate Tax No changes in the existing tax rate payable by domestic companies for the fiscal year 2074/75. The existing general tax rates are as follows: Companies Rate(%) Bank and financial institutions 30 General Insurance Business 30 Cigarettes, Tobacco, Liquor 30 Petroleum companies 30 Special industries 20 Export industries 20 Power generation, transmission, distribution, 20 infrastructure projects etc. Other entities not covered above 25

Value Added Taxes In case of receipt of services from the person outside the Nepal, reverse VAT should be deposited by the recipient at the time of receipt of service or payment whichever is earlier.

Infrastructure Tax Infrastructure tax of Rs 5 per liter is levied on petrol, diesel and airplane fuel at the custom point.

Income Tax Act Transaction-based Tax Particulars Natural person doing business of gas and cigarette with 3% commission or margin Natural person doing business other than mentioned above Natural person engaged in Service sector Business

Income Tax Rate(%) 0.25% of transaction 0.75% of transaction 2% of transaction

Personal Tax Rates Tax Rate(%) 1 15 25 25 40

Individual Couple 350,000 400,000 350,000 to 450,000 400,000 to 500,000 450,001 to 2,500,000 500,001 to 2,500,000 Above 2,500,000 Above 2,500,000 Additional tax on tax computed as per above where taxable income exceeds Rs. 2.5 million.

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