Expansion of tax base over rate hike to boost revenue: Chair Pandey

KATHMANDU: FNCCI Chair Birendra Raj Pandey has called for expanding the tax base rather than increasing tax rates to raise government revenue.

Speaking at an event on Tax Day on Monday, Pandey emphasized the need for policy stability to encourage investment and create a favorable industrial environment.

He highlighted that both domestic and foreign investors consider tax policies and obligations before making investment decisions.

Addressing the country’s current challenges, Pandey noted that Nepal’s economy was already under strain in recent times and that the recent Gen Z protests have added political and social uncertainties. He stressed that for overall economic development, the country requires good governance, anti-corruption measures, transparency in public institutions, clear policies, and stability.

Pandey stated, “You are all aware of the recent developments in the country and the resulting situations affecting the economy and society. Nepal is facing a complex situation. While the economy was already challenging, the Gen Z movement has added political and social challenges.”

He further added that the private sector expects the country to enter a new phase with improved governance, security, investment environment, and policy clarity following these developments and the upcoming elections.

Highlighting fiscal pressures on the government, Pandey reiterated that expanding the tax base, rather than hiking rates, is essential. He concluded that policy stability is crucial for investment expansion and a robust industrial environment.