According to the finance minister, a tax on international visits for Nepalis will encourage domestic tourism.
Finance Minister Prakash Sharan Mahat said on Tuesday that the tax on international vacation packages for Nepalis has been levied for the first time in order to encourage them to visit locations within their own country and avoid capital flight.
The Financial Bill includes a clause requiring Nepalis traveling overseas to pay up to 5% tax on the complete tour package.
Mahat stated at a post-budget presentation that the tax policy on electric cars (EVs) has been rationalized.
"The tax structure on fossil-fuel-powered vehicles has been increased by up to 300 percent." EVs, on the other hand, pay no tax."
According to Mahat, there is no validity to reports that the government has hiked taxes on EVs.
He stated that EVs with capacities more than 100cc have been taxed at a low rate. "Car dealers are selling EVs with huge margins that need to be reduced," Mahat noted.
The customs charge for EVs under 50cc is 10%.
Customs and excise duties for 50-100cc EVs are 15% and 10%, respectively.
Customs and excise duty for EVs between 100cc and 200cc are both 20%.
The customs and excise duties on 200cc-300cc EVs are 40% and 45 percent, respectively, while the customs duty on 300cc EVs is 60%.
The government submitted its yearly budget plan for the fiscal year 2023-2024, which begins in mid-July, on Monday.
The budget for the next fiscal year is 2.37 percent smaller than the current fiscal year's unrevised budget.
The government has allotted Rs1.14 trillion, or 65.2 percent of the overall budget, for recurrent spending, which includes normal salary and allowance expenses.
It has set aside Rs302 billion, or 17.25 percent of the budget, for capital spending in order to construct projects and key infrastructure.
For funding, the government has set aside Rs307 billion, or 17.55 percent of the total budget.
According to Mahat, the liability of loans is increasing. He also stated that social security expenses cannot be reduced, putting a strain on the availability of resources.
The budget states that the government will raise Rs1.24 trillion in revenue, Rs49.94 billion in foreign grants, Rs212 billion in external loans, and Rs240 billion in domestic loans.
"There is a need to change our working style in order to meet the budget's target," Mahat remarked. "We have improved revenue policy so that there is no tax evasion."
"We are hopeful that revenue collection will improve," Mahat remarked. "On that basis, the revenue target has been set."
"The budget for the current fiscal year has been presented quite differently because we have cut on unnecessary expenditure," Mahat explained.
"In terms of budget implementation for the coming fiscal year, we have presented solutions in a point-by-point manner by analyzing the problems," Mahat continued.
He stated that the economic growth rate has been held at 6%, which he believes is not ambitious. "We expect that a balanced fiscal policy and the forthcoming monetary policy will help revitalise the economy," Mahat added.
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