The government readied the final draft of Industrial Enterprises Act,
proposing host of incentives for entrepreneurs, including waiver or
reduction of income tax for enterprises based in remote areas.
The draft prepared by the Ministry of Industry (MoI) in line with the existing Industrial Policy 2010 specified different incentives, including complete or partial exemption of tax and VAT for small, medium and large scale industries. The draft also envisions waiver of income tax for small scale industries.
In an effort to boost industrial production in remote districts, the MoI has proposed providing income tax incentives for industries to be operated in 62 districts, including Bajura, Jajarkot, Dolpa, Baitadi, Dadeldhura, Myagdi, Kailali, Bardia and Mahottari, for 10 years from the date of establishment.
“These industries will get 70-90 percent waiver on income tax in the first 10 years of operation,” said Anil Kumar Thakur, joint-secretary at MoI.
However, industries that use more than 12 percent alcohol in their total production content would be entitled for only 40 percent of tax rebate. The draft also incorporates a provision for 50 percent waiver on income tax for the first year for ICT industries to be established in Technology Park.
In a bid to generate more jobs within the country, the draft incorporates additional incentives for industries in proportion to the jobs they generate. “The government will provide additional 25 percent rebate on income tax to small, medium and large scale industries if they provide jobs for more than six months to 100, 200 and 500 people respectively,” the draft states.
Likewise, industries having women, Dalit or differently-abled persons as 50 percent of their total workforce are also entitled 40 percent tax exemption.
MoI officials, who expect to get the draft okayed by MoF soon, also said the draft is favorable for industries using alternative energy to lower fossil fuel consumption. “Industries won’t have to pay tax for expenses made to install machines or plants to generate alternative energy,” the draft states. But these industries should claim rebate within five years of the installation of plant.
The act also promises incentives to industries that buy insurance products for risk management, diversify their production portfolio and launch corporate social responsibility schemes.
Similarly, it also proposes VAT waiver for products of small scale industries for 12 years from the date of establishment. It also incorporates a provision that proposes levying one percent customs tariff on imports of transformers and generators along with other machineries.
The draft prepared by the Ministry of Industry (MoI) in line with the existing Industrial Policy 2010 specified different incentives, including complete or partial exemption of tax and VAT for small, medium and large scale industries. The draft also envisions waiver of income tax for small scale industries.
In an effort to boost industrial production in remote districts, the MoI has proposed providing income tax incentives for industries to be operated in 62 districts, including Bajura, Jajarkot, Dolpa, Baitadi, Dadeldhura, Myagdi, Kailali, Bardia and Mahottari, for 10 years from the date of establishment.
“These industries will get 70-90 percent waiver on income tax in the first 10 years of operation,” said Anil Kumar Thakur, joint-secretary at MoI.
However, industries that use more than 12 percent alcohol in their total production content would be entitled for only 40 percent of tax rebate. The draft also incorporates a provision for 50 percent waiver on income tax for the first year for ICT industries to be established in Technology Park.
In a bid to generate more jobs within the country, the draft incorporates additional incentives for industries in proportion to the jobs they generate. “The government will provide additional 25 percent rebate on income tax to small, medium and large scale industries if they provide jobs for more than six months to 100, 200 and 500 people respectively,” the draft states.
Likewise, industries having women, Dalit or differently-abled persons as 50 percent of their total workforce are also entitled 40 percent tax exemption.
MoI officials, who expect to get the draft okayed by MoF soon, also said the draft is favorable for industries using alternative energy to lower fossil fuel consumption. “Industries won’t have to pay tax for expenses made to install machines or plants to generate alternative energy,” the draft states. But these industries should claim rebate within five years of the installation of plant.
The act also promises incentives to industries that buy insurance products for risk management, diversify their production portfolio and launch corporate social responsibility schemes.
Similarly, it also proposes VAT waiver for products of small scale industries for 12 years from the date of establishment. It also incorporates a provision that proposes levying one percent customs tariff on imports of transformers and generators along with other machineries.
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