Experts Suggest VAT Reduction, Income Tax Exemption Hike, and Structural Reforms in Budget Discussion
Summary
Experts suggest reducing the VAT rate, increasing the personal income tax exemption, and implementing structural reforms in Nepal's upcoming budget to boost economic demand and improve fiscal federalism.
Key Points
- Experts recommend reducing the VAT rate from 13 percent to 12, 11, or 10 percent to stimulate economic demand.
- The personal income tax exemption limit should be increased to at least 1 million to 1.2 million Rupees considering rising living costs.
- Debt management needs improvement by linking internal debt to specific projects rather than current expenses.
- Nepal's fiscal federalism shows anomalies where the central government borrows despite large savings at all government tiers, requiring legislative amendments.
