The budget formulation process for the upcoming Fiscal Year 2083/84 has formally begun.
To collect concrete suggestions on revenue policy, tax structure, customs rates, revenue administration, and macroeconomic reforms prior to drafting the budget, the government formed a Revenue Advisory Committee through a ministerial decision on Magh 28.
According to Ministry spokesperson Tank Prasad Pandey, the committee has already begun its work under the coordination of the Revenue Secretary at the Ministry of Finance.
The committee includes representatives from the government, central bank, academia, and private sector umbrella organizations. Members include the Head or a designated senior professor from the Central Department of Economics at Tribhuvan University, a Joint Secretary from the Ministry of Industry, Commerce and Supplies, an Executive Director from Nepal Rastra Bank, and two experts (an economist and a tax expert) nominated by the Ministry of Finance.
Private sector representation includes the President or designated senior officials from Federation of Nepalese Chambers of Commerce and Industry, Nepal Economic Association, Confederation of Nepalese Industries, Nepal Chamber of Commerce, Nepal Industry and Traders Federation, and Federation of Nepal Cottage and Small Industries. A Joint Secretary from the Revenue Management Division of the Ministry has been designated as Member-Secretary.
The committee has been tasked with providing recommendations on policy and legal reforms related to income tax, Value Added Tax (VAT), excise duty, education service fee, digital service tax, e-commerce taxation, and other internal taxes under the Economic Act. It will also recommend revisions to tax rates, simplification of procedures, improvements to the tax system, and reforms in revenue administration and organizational structure.
In addition, the committee will suggest policy and legal reforms concerning industrial promotion and protection, import-export regulation, trade in services, investment promotion, supply management, and tax and non-tax incentives. It will also review customs rates, measures to protect domestic production, improvements in valuation systems, trade facilitation, border management, and customs administration reforms.
The mandate further includes studying revenue leakage control, anti-smuggling measures, foreign exchange regulation, economic crime control, and asset laundering investigations, along with necessary legal and institutional reforms. Revenue and policy reforms in agriculture, energy, tourism, civil aviation, and natural resource management are also included.
The committee will examine issues in banking, financial institutions, insurance, remittance, capital markets, cooperatives, and real estate transactions, and recommend solutions related to revenue mobilization. It will also identify new sources of non-tax revenue, review rate structures, address tax duplication among federal, provincial, and local governments, and suggest improvements in intergovernmental revenue management and revenue sharing.
Through comparative analysis of international, regional, and national economic conditions, the committee will provide recommendations related to economic development. It will study expansion of the tax base, introduction or abolition of taxes, and consult experts, industrialists, and businesspersons before making recommendations.
To ensure effective functioning, nine thematic subcommittees have been formed. These include subcommittees on internal revenue, customs, revenue leakage control and investigation, industry and trade promotion, agriculture-energy-tourism sectors, financial sector and capital markets, non-tax and intergovernmental revenue management, macroeconomic analysis, and anti-money laundering and research. The anti-money laundering subcommittee will also focus on strategies to exit the FATF grey list and recommend risk mitigation measures.
The Ministry of Finance has invited suggestions from relevant government bodies, private sector organizations, academic institutions, stakeholders, and the general public regarding tax policies to be adopted in the upcoming budget. After collecting suggestions, the subcommittees will submit their reports to the main committee by the end of Chaitra. The committee is scheduled to submit its final consolidated report to the Finance Minister by the end of Baisakh 2083.
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