Nepal Business Tax Simplification: CNI’s Plan for Economic Growth via SEZ, IT Park Incentives

10th May 2025, kathmandu

The Confederation of Nepalese Industries (CNI) has made bold proposals to the Government of Nepal. They are pushing for reforms in the national budget to help boost economic growth. These reforms focus on tax simplification, industry incentives, and digital transformation.

Nepal Business Tax Simplification

A major concern for CNI is Nepal’s complex tax system. They suggest simplifying it to help businesses thrive. The focus is on streamlining taxes like income tax, customs duties, VAT, and excise duties. According to CNI, reducing the number of taxes will make it easier for businesses to operate.

In particular, CNI proposes removing the VAT on digital payments. This move would encourage more people to use digital payment systems. It would also promote the use of e-commerce platforms, which are vital to modern economies.

Incentives for Special Economic Zones and IT Parks

CNI is also advocating for tax exemptions in Special Economic Zones (SEZs) and IT parks. These areas are crucial for business growth and attracting investment. By offering tax breaks on profits from industrial activities in these zones, CNI believes that businesses will be more inclined to invest and grow.

Moreover, they recommend offering tax rebates on goods and services that contribute to domestic production. This would reduce Nepal’s dependence on imports and increase the competitiveness of local industries. The aim is to strengthen Nepal’s economy by encouraging businesses to focus on local production.

Infrastructure and Public-Private Partnerships (PPP)

Infrastructure development is another priority for CNI. They highlight the need for improved roads, airports, and other essential facilities. CNI recommends increasing Public-Private Partnerships (PPP) to achieve this. PPPs can help create a better environment for economic growth by attracting private investment into public infrastructure projects.

Additionally, CNI stresses the importance of investing in digital infrastructure. This is especially important to support the growth of e-commerce and online transactions. A more robust digital infrastructure will make it easier for businesses to operate smoothly in the online space.

Boosting Nepal’s Digital Economy

The digital economy is growing rapidly in Nepal. To support this, CNI suggests building IT parks across the country. These parks would provide a space for tech companies to thrive. They also recommend offering tax exemptions on software exports. This would encourage local developers to export their software and become global players in the IT industry.

CNI believes that creating a supportive environment for tech startups will lead to more job opportunities in the digital sector. It will also help position Nepal as a competitive player in the global digital market.

Attracting Foreign Investment

Another key proposal is to attract more foreign direct investment (FDI) into Nepal. CNI recommends creating an investment-friendly policy environment. This would make Nepal more attractive to foreign investors, especially in sectors like manufacturing, IT, and tourism.

CNI suggests that the government should focus on long-term economic priorities when crafting policies. By doing so, Nepal can tap into global markets and attract the kind of investment that will drive future growth. This, in turn, will create more opportunities for local businesses and workers.

Creating Jobs and Boosting Competitiveness

CNI’s ultimate goal is to create a more competitive economy. They believe that these proposed reforms will not only improve Nepal’s business environment but also create more jobs. The reforms could open new avenues for industries to grow and thrive in both local and international markets.

By simplifying taxes, offering incentives, and building better infrastructure, Nepal can become a more attractive place for businesses to invest and grow. CNI hopes that the government will consider these proposals when preparing the next national budget.

Conclusion

In conclusion, CNI’s proposals aim to make Nepal’s economy more dynamic and competitive. By addressing key areas like tax simplification, infrastructure, and digital economy development, Nepal can achieve sustainable economic growth. The confederation believes that with the right reforms, Nepal can build a stronger future and attract both domestic and international investments.

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