September 8: The government has revised the tax rates that courted controversy for favouring certain business establishments.

The controversial tax provisions included in the budget for the current fiscal year has been amended by a cabinet meeting on Wednesday upon the recommendation of Finance Minister Janardan Sharma.

Finance Minister Sharma was forced to resign from his post after he was accused of changing the tax rates by inviting unauthorized persons inside the ministry on the eve of the budget announcement. Around half a dozen Galvanized Iron (GI) wire industries of Biratnagar were forced to shut down due to the change in tax rates. Industrialists of eastern Nepal has resorted to protest against the unfair tax rates imposed by the government.

The Council of Ministers has revised the tax rates of sanitary pads, GI wire and cooking oil.

According to informed sources, the cabinet meeting has revoked the decision to increase the tax imposed on raw materials required for producing GI wire and fixed the old rate.

The importers will have to pay only 5 percent customs duty to bring the raw materials required for GI wire industry. However, the government has not changed the excise duty imposed on this material.

The government has also decided to lower the customs duty on raw materials required for producing sanitary pads within the country.

The government had announced in the budget for the current fiscal year to waive 90 percent tax for the import of ready-made sanitary pads. This put the domestic industries that produce sanitary pads in trouble because the cost of production would be higher than the imported pads.

The government had made arrangements for biscuit and noodle industries to import readymade edible oil by paying just 5 percent taxes while the cooking oil manufacturing  companies had to pay 10 percent taxes for importing raw materials required for producing oil. Now, the government has lowered the taxes on raw materials to 5 percent.

Meanwhile, the government has not changed the customs duty imposed for the import of electric vehicles despite adopting a policy to promote clean energy.

Sharma, who courted controversy for changing the tax rates in favour of certain business houses, was reinstated to his post after the parliamentary probe committee gave him a clean chit into the allegation.

Soon after his reinstatement, Sharma had formed a committee to study the issue of the controversial tax rates. The committee was headed by Revenue Secretary Rameshwar Dangal. Other members of the committee included Director General of the Inland Revenue Department Ritesh Shakya, Revenue Division’s Chief Bhupal Baral ad Director General of the Department of Customs Kamal Bhattarai.

Minister Sharman urged the cabinet to change the tax rates as per the recommendation of the committee.