Big tax payers have suggested to increase the range, not the tax rate in the budget. Since the tax rate in Nepal is high compared to the neighboring countries, they insist on increasing the revenue collection by expanding the scope instead of increasing it further.

In the first session of the Kantipur Economic Summit 2025, "Dialogue Expectations and Experiences with Big Taxpayers", they said that due to the state's failure to expand the scope of taxes, the expected revenue was not collected and its direct impact was on the state's resources. 

In the dialogue on 'Questions to the Finance Minister', Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has promised that the budget will bring speed to the economy. According to the finance minister, homework is being done on the way to increase the range of tax rates in the next budget as suggested by the big tax payers.

Currently, 44 percent of the total revenue collection is direct and 56 percent is indirect taxes. According to the data of the Internal Revenue Department, the contribution of the top 50 taxpayers is 46 percent of the total tax collected in Nepal. The speakers of the 'Economic Summit' have expressed their concern that the tax system is not fair, the investment environment in the country has deteriorated, the revenue has decreased and the informal economy is flourishing. 

Chairman of Nabil Bank, Upendra Paudyal, says that when the government raised exorbitant taxes from the private sector, investors could not expand further investment. He suggested that the revenue can be increased by increasing the tax scope and reducing the rate.

'It is not necessary to pay the effective tax, but last year all banks and financial institutions have paid about 15 billion and only Nabil has paid 1.62 billion in tax,' says Chairman Paudyal, 'Foreign investment is to be brought to Nepal, where does the investment come from with the effective tax? Such a decision will not bode well in the future. Revenue can be increased not by increasing taxes, but by reducing them, and by expanding the scope. He believes that the government has imposed taxes that are not justified by going beyond international practice. 

"The government collects 30 billion in tax from the banking sector every year, 45 billion to 50 billion including TDS," he says, "The government has imposed more taxes in the most transparent and orderly banking sector." He suggests that the government should make good use of the tax paid by taxpayers. He says that taxes will have a positive impact on the economy if they are used properly. "The economy will improve only if the tax paid by taxpayers can be spent on infrastructure. The government needs to increase capital expenditure," he says. ``Sometimes mistakes happen while doing business, we pay taxes that shouldn't have been paid by mistake, it should have been returned, the tax has already been deposited in the government's account, there is no mechanism to return it,'' President Paudyal says. He complains that although the principle of taxation is the same, the taxation is different from group to group. "The principle of tax is the same, but when taxing is done by one group, another group does not accept it," he says, "for example, tax is not determined for four years, but after four years when tax is determined, the investment and profit brought by that industry will not be able to pay that tax and its fine."

It is his experience that investors have to be in a state of stress not only when investing, but also when the tax is determined. "Even though the corporate culture in Nepal looks clean, you have to face various problems while working," KC says, "Not only multinational and foreign investors, but also domestics are now losing confidence to invest in Nepal." He says that according to the principle of taxation, transparency and benefit of the doubt are given to taxpayers and if there is a single practice from tax assessment to the courts in a timely manner, the confidence of investors will increase and an investment environment will be created.

Casey says that only the companies he represents pay 45 billion rupees in taxes annually. "The liquor company represented by me and Surya Nepal alone pay 45 billion rupees in taxes to the state annually," he says.

He said that the government is unaware that increasing the tax on alcohol and smoking has encouraged illegal trade. "Fake and illegal smoking materials are scattered in the border area," he says. There are many problems in Nepal, from industry registration to environmental impact assessment (EIA).

Director of Vishal Group Anuj Agarwal says that the government is increasing the tax rate and the ability to invest is decreasing. He suggested that the government should not increase the tax rate without preparing the base of the economy. "The ratio of taxes to the gross domestic product (GDP) of Nepal is high in South Asia, it is 24 percent in Nepal, it is only 14 to 15 percent in other countries of South Asia, it is not enough to increase the tax rate and percentage," he says, "The more we increase the tax on the formal sector, the more the ability to invest decreases." He says that the revenue of the government is decreasing when the goods are imported illegally. "The Indian government has been reducing taxes in various sectors for the last 5-7 years, but the government has been increasing them in ours," says Agarwal, "due to which goods are being illegally brought into Nepal from India, those goods are also being consumed, but they are not reflected in the revenue, so it needs to be controlled." Ncell Chief Executive Officer Jabbor Kayumov expresses concern that the telecommunication sector here is headed for crisis. "Now there are only two telecommunication companies left in Nepal, Ncell and Nepal Telecom, while earlier there were many companies," he says, "this is a worrying issue, we two companies are also going through a complicated situation." 

According to Kayumov, around 2010/2012, the telecommunications industry contributed 3.8 to 4 percent to the gross domestic product (GDP) in Nepal, but now it has decreased to 1.2 percent. "In India and Bangladesh, the telecom sector is flourishing, but in Nepal, it seems to be going in the opposite direction," he says. "We don't have much time, the future is going to be digital and the telecommunication industry is its enabler," he says, "so we have to save this sector."

He also says that introducing 5G technology in Nepal is a challenge. He thinks that due to high taxes and lack of capital, it is not possible to invest in such a new technology. "5G is necessary, but it requires a lot of capital," he says, "60 percent of our income goes to taxes, 20 percent is spent on purchasing new equipment, and the remaining 20 percent has to be used for salary, rent, and other expenses. In such a situation, how to invest in 5G?" 

According to him, after paying taxes, companies in India can reinvest the remaining profits in new technologies, which is not possible in Nepal. ``It is difficult for both Ncell and NTC to introduce 5G,'' he says.

Finance Minister Paudel says that the upcoming budget will be the right size rather than too big and too small. "The budget for the coming fiscal year will be neither big nor small, just the right size, don't encourage me to say numbers," he says, "The number in the budget is not big, what policy comes and how it will be implemented is an important issue." Although he does not want to say anything about the

budget, the finance minister says that a balanced budget will be brought according to the needs of the country. Acknowledging that the capital expenditure has not been achieved according to the target, Finance Minister Paudel says, "The reduction of capital expenditure is not only a current problem but a long-standing one. Structural changes are needed to improve it, and work is being done on it." Finance Minister Paudel considers the challenges of infrastructure construction, not completing projects on time, not completing them with quality and not being able to complete the work at the allocated cost as the main challenges. He says, 'Now we will not sit looking at the obstacles of development, we will improve the situation of capital expenditure by solving the problem as a whole.' "The government has taken initiatives to raise the morale of the private sector," he says, "but this is not enough, the results are yet to come, it will take some time for the results of the steps taken by the government."