Arju Rana Deuba, central member of the main opposition party Congress and Member of Parliament, has said that the budget brought by the government has provisions to benefit certain business houses or traders.

In the Sunday meeting of the House of Representatives, MP Rana, while participating in the discussion on the allocated budget of the Ministry of Federal Affairs and General Administration, the Ministry of Energy, Water Resources and Irrigation and the Ministry of Finance, alleged that the budget was arranged to allow business houses to evade taxes. He did not mention which business houses will be benefited.

'I am unable to see any economic or administrative logic in the proposed provision of Section 57 (1) of the Income Tax Act . If there is any problem in that section, we could correct it through rules and guidelines . Instead, it can be suspected that they are trying to fulfill their vested interests by proposing to amend the said clause,' she said, 'This clause seems to be trying to benefit certain business houses or traders . Such a provision can eliminate the very basis of collecting income tax and capital gains tax of the government . When there is a change in the effective control of commercial establishments such as telecommunication, hydropower, medical college, alcohol industry, which require a license, the way for the government to collect taxes will be closed . The new system that is trying to do this should be stopped otherwise the revenue of the Nepal government will further decrease.'

MP Rana mentioned that modern economists oppose the principles of neutrality, efficiency, certainty and simplicity, effectiveness and fairness and flexibility in taxation and said that the government's budget is not consistent with any of these principles of taxation. 'The 2081/82 COBJET does not seem to cover the principles mentioned in the religious texts nor the principles of the modern tax system . The tax system should be neutral and fair, but looking at some provisions of the budget and economic bill presented in the parliament, it can be seen that it is easy for special business groups to evade direct capital gains tax.' 

Referring to the proposal of 10 percent advance income tax on the import of live animals, meat, vegetables, fruits and nuts, MP Rana said that the provision of advance income tax will force importers to pay tax at the time of import without assured income. Stating that to pay 10 percent tax on the transaction value, the trader should make a minimum of 40 percent profit, she also pointed out that this means that the price of these essential items may increase by at least more than 40 percent.  MP Rana also said that the budget brought by the government violates international commitments on customs rates and excise duty system. She said, 'I want to warn the government that such actions may cause problems in our trade and international economic relations in the future.'