FNCCI President’s Budget Recommendations To Prime Minister KP Sharma Oli For Nepal Economic Growth
29th June 2025, Kathmandu
Chandra Prasad Dhakal, President of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), has urged Prime Minister KP Sharma Oli to improve several provisions in the fiscal year 2082/83 budget and recently implemented policies related to the private sector.
FNCCI President’s Budget Recommendations PM
During a meeting held on Saturday, President Dhakal expressed gratitude for including many of the federation’s suggestions in the budget. However, he highlighted that some provisions and policy measures have negatively affected businesses and requested necessary facilitation to address these issues.
Prime Minister Oli assured that his government is committed to creating a private-sector-friendly business environment and welcomed the federation’s recommendations positively.
Follow-up Meeting With Deputy Prime Minister And Finance Minister
On Sunday, President Dhakal also met with Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel to draw his attention to the FNCCI’s suggestions regarding the current budget.
Key Recommendations Presented to the Prime Minister
President Dhakal submitted recommendations addressing various concerns, including:
Value-added tax (VAT) imposed on air tickets and precious stones
Facilities provided to the hydropower sector
Implementation of Euro 5 and 6 standards on vehicles
Regulation of fairs and festivals
Mandatory Maximum Retail Price (MRP) labeling
Import-export of botanical products
Requests to Remove Luxury Tax and VAT on Precious Metals
The federation requested the removal of VAT and expanded the luxury tax on gold and silver businesses. They also highlighted the negative impact of VAT on air tickets and a 2% luxury tax on five-star hotels and resorts, which has contributed to Nepal becoming an expensive tourist destination. Dhakal pointed out that these measures have increased the trend of tourists booking tickets from other countries, creating a double burden.
Concerns Over Vehicle Import Regulations
The recently implemented Euro 5 and 6 standards by the Ministry of Forests and Environment have created obstacles for importing vehicles and spare parts. FNCCI requested arrangements to allow the import of goods already ordered under the previous Euro 3 standards.
Extension Of Tax Incentives For Hydropower Projects
Given that India and Bangladesh have begun importing electricity from Nepal, the federation urged extending the current tax exemptions for hydropower project construction, which expire in 2082, until 2092. This extension is expected to boost overall infrastructure quality and development.
Clarification Needed On Power Purchase Agreements
FNCCI expressed concerns about investment uncertainties caused by unclear “take and pay” policies under run-of-river hydropower projects. They called for the government to provide clearer guidelines on the recently amended provisions.
Support For Local Fairs And Festivals
More than 130 district and municipal chambers affiliated with FNCCI have organized local fairs and festivals for over two decades to promote local products and identity while supporting economic activity. However, an increasing trend of local governments outsourcing these events has emerged. FNCCI requested that only industry chambers be allowed to organize these fairs and festivals to continue this tradition effectively.
Facilitation For Export And Labeling Regulations
The federation also called for easing export challenges of steel products affected by Indian quality standards and portal issues. They requested tariff adjustments favoring finished goods over raw materials in the budget. Furthermore, FNCCI asked for mandatory MRP labeling on domestic and imported goods to be implemented in consultation with the private sector.
For the floriculture sector, they urged simplifying and making cost-effective the Pest Risk Analysis (PRA) procedures for the import-export of botanical products.
Expectations For Economic Growth
President Dhakal expressed confidence that addressing these issues would significantly promote investment, create employment, and improve the economy. He emphasized that the partnership between the government and the private sector is essential for accelerating Nepal’s reform-oriented economy.
For more:- FNCCI President’s Budget Recommendations PM
