Kathmandu. Nepal Bankers’ Association (NBA) has submitted important suggestions to the government. The association has submitted important suggestions to the government for the budget for the coming fiscal year 2083-84.
Here are the key suggestions submitted by the association:
1. Corporate income tax on banks and financial institutions should be reduced from 30 percent to 25 percent at par with other
businesses.
2. Increase the minimum limit of personal income tax to Rs 1 million per annum and limit the maximum tax rate to 25 per cent from a maximum of
39 per cent.
3. To attract the general public to the banking system, the tax on deposit interest should be reduced from 6 percent to 5
percent.
4. The entire provision (loan loss provision) amount made for good class loans and non-banking assets as per the norms of Nepal Rastra Bank should be allowed to be fully deducted for income tax purposes.
5. Banks should consider the mandatory expenses made under Corporate Social Responsibility (CSR) as part of their business activities and provide the facility of complete
deduction of expenses.
6. Increase the limit of tax exemption on donations or gifts to social organizations from Rs 1 lakh to Rs 5 lakh (or 5% of taxable income, whichever is
lower).
7. Provision should be made not to deduct tax on the assistance given to employees and their families who die or become disabled at the workplace, medical treatment and work expenses
.
8. The definition of general interest rate of 15 percent per annum in the Income Tax Act should be revised and the bank rate fixed by the Rastra Bank should be considered as the normal interest
rate.
9. The time period allowed by the Inland Revenue Department to assess the revised tax should be reduced from the current 4 years to 2
years.
10. The provision of imposition of 50 per cent duty on minor errors caused by inadvertence in tax filing should be removed and penalty should be imposed only for intentional mistakes
11. If the taxpayer withdraws the tax cases pending in the court or revenue tribunal for more than 10 years, the fee and
interest levied on them should be waived.
12. Provision should be made to pay the education service fee collected from the students going abroad on a quarterly basis instead of monthly
13. The provision of mandatory linkage of approved retirement funds operating by banks to social security fund or other government funds should be completely removed
