Tax rates have been proposed in a scientific manner: Finance Minister «

Tax rates have been proposed in a scientific manner: Finance Minister

Finance Minister Dr Prakash Sharan Mahat has said the revenue rates of the budget for the upcoming fiscal year have been scientifically proposed.

Responding to queries raised by lawmakers during the general discussions on the annual estimates of revenue and expenditure for fiscal year 2023/24 in the second meeting of the National Assembly today, he argued taxing the electric vehicles and imposition of Value Added Tax (VAT) on daily consumable goods will not hit the general public.

“A narrative is being tried to create that the common man has been affected due to the increment in tax on electric vehicles and imposition of VAT on onion, potatoes and apples. Do not be misled by this,” the Finance Minister said and argued that the tax on EVs has been maintained in a logical manner and it is not increased. “EVs with lower capacity are charged tax at lower rate while those with greater capacity higher tax rates and EVs more than this capacity have been taxed higher.”

Stating that nobody would opt for petroleum-based vehicles instead of EVs due to this taxation rate, he said this has been ensured in the budget. “Make a comparison. The rate of tax on EVs is far less than that on the lower-order petroleum-based vehicles. We have managed the tax rate in such a way that the revenue would not be too much low and the promotion of EVs would also not diminish,” Finance Minister Mahat reiterated.

According to him, a lower tax rate has been proposed on EVs as now we have to promote the EVs, decrease the consumption of petroleum products and increase the use of electricity in the transport sector. “No change has been made in this policy,” he said, adding that it was he who proposed a general increase in the tax rate for EVs. “Will I leak the information on increase in tax rate when I myself have proposed an increment in tax rate? If I was in favour of the traders I would have retained the same tax rate,” he stated.

He made it clear that there was no chance to decrease tax on EVs and it would not be decreased. “It will either remain what it is or else it will increase to some extent,” the Finance Minister said. Stating that the vested interest group has made a hullabaloo on the topic of increase in the tax on EVs, he said this group was venting ire at him as they were reaping profit of millions from a single vehicle and as the new provision would reduce their ‘income margin’.

The Finance Minister asserted that the revenue has been retained in a scientific way, the VAT range has been expanded and the local industries and businesses have been promoted. Making it clear that the topic of turning the slogan ‘Made in Nepal, Make in Nepal’ meaningful has been stated in the budget, he said, “Parts are brought from foreign countries and assembled here. This creates employment opportunities for Nepalis and the domestic economy is also boosted in this way. That’s why we have proposed the revenue rates accordingly. There might be slight error while proposing the tax rates and some might have been missed out. Otherwise, we have provided some protection to such products.”

The Finance Minister reiterated that this facility has made a big contribution to promoting domestic products. Noting that the government carries out works with right intention, he said the country’s economy will prosper only if there is equal cooperation from the ruling and the opposition parties in this.