Finance Ordinance 2006 approved; tariff cuts in 125 items

January 10, 2006
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Monday’s cabinet meeting chaired by His Majesty King Gyanendra has approved the Finance Ordinance 2006 that slashed tariffs on import of 125 items, according to reports.

According to government officials, the average custom rate has been slashed to 8 percent from the existing 9.6 percent. “Customs rates have been adjusted mainly for third country imports, which won’t adversely affect the competitiveness of domestic industries,” the Kantipur daily quoted a government official as saying.

Customs rates have been lowered on some third country manufactured two wheelers, electronic goods, television sets, musical equipments and power gathering sets among others.

The ordinance however hasn’t laid out any policies and programmes to compensate for possible loss of custom revenue due to adjustment.

The paper further said that the Ordinance has also made some minor changes in income tax.

Minister of State for Finance Dr Roop Jyoti

Dr Roop Jyoti (File Photo)
The report quoted some sources as saying that Minister of State for Finance Dr Roop Jyoti was compelled to compromise on the customs rates rollback for some goods after top officials of the Finance Ministry opposed the proposal for drastic cuts.

The present tariff cut would cost the state coffers Rs 1.70 billion in estimated customs mobilization for the current fiscal year.

 

Vice Chairman of the National Planning Commission Dr Shankar Prasad Sharma (File Photo)
The ordinance, however, has not changed the annual revenue target and recurrent expenditures.

Vice Chairman of the National Planning Commission Dr Shankar Prasad Sharma presented a review of the progress of the Annual Programme for Fiscal Year 2005/2006 up to the present during the 198th meeting of the National Planning Commission (NPC) held in the presence of His Majesty at the Royal Palace Monday.