KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) have sought revision in income tax slabs and VAT rate in the upcoming budget for 2021-22 Fiscal Year.
Submitting its recommendations to Finance Minister Bishnu Prasad Poudel on Sunday, FNCCI, the umbrella organization representing country’s private sector, highlighted the need to bring down tax rate and provide relief to businesses and the economy hit hard by the COVID-19 pandemic.
The FNCCI has urged government to reduce the minimum threshold of income tax to Rs 700,000 annually for an individual and Rs 800,000 for a married couple. Currently, the exemption limits for individuals and married couples are maintained at annual income of Rs 400,000 and Rs 450,000 respectively.
Similarly, it requested the government to bring down income tax rate from 5 percent to a maximum of 25 percent. As per the current provision, married people with an annual income of Rs 450,000 to Rs 550,000 have to pay 10 percent tax, while those with an annual income of Rs 550,000 to Rs 750,000 will have to pay 20 percent. Likewise, married people with an annual income of above Rs 750,000 and up to Rs 2 million will have to pay 30 percent tax.
Along with this, the FNCCI also urged the government to bring down the rate of Value Added Tax (VAT) to 10 percent from existing 13 percent.
Meanwhile, Minister Poudel said that the government was ready to provide support to the private sector and expressing the belief that the government would incorporate the suggestions of FNCCI.