Nepal government is going to establish a Nepali-China joint-venture bank to help the trade between the two nations with proper banking facility.
Speaks are underway with the Chinese authorities to establish a JV financial institution to make the deal with the northern neighbor through the banking system.
“Establishment of such bank can make the LC (Letter of Credit) opening easy and will also help make the trade formal,” said Finance Secretary at the Ministry of Finance Rajan Khanal at a conversation with the traders and entrepreneurs at the Nepal Chamber of Commerce on Wednesday.
He declared that a Chinese bank is likely to come to Nepal soon and there was a possibility to create a joint-venture institution with a government-owned bank.
Khanal said the trade in the south has local nature whilst the trade in the north is not done through the banking channel. The dealers are using TT (Telex Transfer) also referred to as wire transfer or draft to make the settlement to the Chinese traders. The LC is an instruction from the importers to a bank in a foreign nation to pay the money to the exporters when the required conditions are met whilst TT is the transfer of money from one bank account to another through electronic means.
Nepal imported goods worth Rs. 186 .6 billion in the first 11 months of the present fiscal year 2018/19 from China and exported products worth Rs. 1.96 billion.
Khanal said that the government was serious about addressing the grievances of the non-public sector and was working to make a better investment climate with better bonuses and tax waiver policies.
“But forget about running the businesses on tax incentives constantly. As we are the members of the World Trade Organisation (WTO) and South Asia Free Trade Area (SAFTA), responsibilities on import of foreign goods will go down slowly so you have to develop competitiveness,” he warned the entrepreneurs.
He additionally said that the government wanted to interact with the business association in the nation to create a list of actual raw materials.
Based on him, the government wanted to promote domestic industry and products. But some finished goods are raw materials for some industrialists. Therefore, some concerns of the traders/importers cannot be addressed.
Khanal said that 5 percent of incentives on the domestic garment and 10 percent customs duty on imported books will not be reconsidered.
Revenue Board in the offing
Secretary of Revenue Lal Shankar Ghimire declared that the government was going to establish a Revenue Board in the first month of the next fiscal year.
“The government has assured to establish a permanent Revenue Board. It will enter into existence from the start of the next fiscal. As the government wants to facilitate the business environment in the nation, it wants to have an intensive discussion with the private sector to make the board more effective,” he said.
He also said that the Ministry was creating a home delivery system for the Permanent Account Number (PAN) cards which would be executed soon.
Ghimire declared that the government was trying to protect the goods that have the possibility to make the country self-reliant.
“The government is clear that the security could sometimes be harmful to the customers and the country as the consumers have less choice and the country losses income, but protection measures are being applied to let the domestic business develop,” he said. President of the NCC Rajesh Kazi Shrestha demanded that the industries that import raw materials that have an adverse impact on land and agriculture should not be promoted.