Kathmandu, June 12
Nepali Congress leader Minendra Rijal has commented that the system of imposing a 13 per cent value added tax on goods and services is ‘unprogressive’ , and demanded that its relevance be evaluated.
Rijal, who looks after the Finance portfolio in the ‘shadow cabinet’ of the main opposition party, says the share of direct tax should increase in the revenue system.
The government had introduced the system in 1997 following a proposal of then finance minister Ram Sharan Mahat. Though Mahat is also a Nepali Congress leader, another economist from the party has raised a question over the system’s relevance now.
Rijal says the tax system was implemented at a time when there was not a foundation for taxation and tax system’s contribution to the gross domestic product was also low. “But now, we already have a strong foundation of the tax system. Why shouldn’t we strengthen the direct taxation system?”
Rijal also adds that the VAT system is not progressive as the same rate applies to the rich and the poor.
