November 16, 2025

Minister Khanal Prioritizes Investment Security, Job Creation and Tax System Improvement

Mina Aryal Latest, News, Special(Front-center), Top News 0

16th November 2025, Kathmandu

Finance Minister Rameshwar Khanal asserts that Nepal’s economy is on the path to recovery through strong fiscal and monetary policy coordination.

Minister Khanal Investment Security

Speaking at the Nepal Chamber of Commerce, he revealed the estimated NPR 78 billion damage from the Gen-Z Movement, including NPR 36 billion to the private sector. The article details the government’s reconstruction plan and the private sector’s key demands for tax reform, customs adjustment, and resolving the cooperative crisis.

1. A New Direction for Economic Stability

Nepal’s economic landscape, recently strained by global shocks and domestic political movements, is set for reform, according to Finance Minister Rameshwar Khanal. Speaking at a dialogue organized by the Nepal Chamber of Commerce (NCC), Minister Khanal assured the private sector that the government is dedicated to economic recovery through coordinated fiscal and monetary policies.

He emphasized that building an environment of trust, investment security, and job creation is the government’s paramount objective.

2. Fiscal and Monetary Policy Alignment: The Path to Recovery

Minister Khanal strongly believes that the economic malaise will be overcome through seamless synchronization between the government’s economic (fiscal) policy and the central bank’s monetary policy.

This coordination is crucial to avoid past conflicts where policies, often aggressive or too passive, resulted in adverse economic consequences.

Key points of his address on policy strategy

Tax System Facilitation: Efforts are focused on simplifying and streamlining the tax payment system to ease compliance for businesses.

Austerity in Public Spending: For reconstruction, the government is committed to financial discipline. This includes cutting fragmented and low-value projects (referred to as “value tax not present projects”) to allocate resources effectively for necessary rebuilding.

3. The Toll of the Gen-Z Movement: NPR 78 Billion in Damages

A significant portion of the Minister’s speech addressed the devastating impact of the recent Gen-Z Movement. Providing official estimates, he detailed the scale of the destruction:

Sector Affected	Estimated Damage (NPR Billion)	Affected Units	Scope of Damage
Total Damage	78 Billion	1,957	Across approximately 55 districts
Private Sector	36 Billion	419	Hotels, businesses, and private property
Government Sector	42 Billion	1,538	Federal, provincial, and local government units (including 514 local levels)

Minister Khanal reported that approximately NPR 23 billion has been claimed from insurance companies by the private sector, and the government is actively monitoring the claim settlement process to ensure timely payment.

4. Private Sector Demands and the NCC’s Agenda

Nepal Chamber of Commerce President Kamlesh Kumar Agrawal utilized the platform to present a strong set of demands aimed at boosting investor morale and creating a competitive business environment.

Area of Concern	NCC Demand/Suggestion	Rationale
Customs Duties	The maximum customs tariff cap at 25%.	To adjust to the recent widespread GST cuts in India and create a competitive market.
Value Added Tax (VAT)	Implement a two-tier or multi-tier VAT system.	To align with international practices and remain competitive following Indian tax adjustments.
Cooperative Crisis	Immediate establishment of an Asset Management Company.	To safeguard the savings of small entrepreneurs and the general public affected by the crisis in the cooperative sector (one of the three pillars of the economy).
Tax Audit & Governance	Limit Auditor General’s audits to government bodies only; move all tax-related services to online platforms.	To end the harassment faced by the private sector and enhance efficiency and transparency.
Investment Security	Guarantee security to uplift investor confidence, which has been severely weakened.	To reverse the trend of high business costs and potential business flight.

5. Conclusion: A Commitment to Structural Reform

The dialogue confirmed the government’s commitment to implementing structural reforms and exercising fiscal prudence. By coordinating fiscal and monetary measures and addressing the massive reconstruction needs post-Gen-Z Movement, Minister Khanal aims to restore financial discipline and steer the economy towards sustainable growth, meeting both immediate and long-term private sector expectations.