Commerce ministers from SAARC countries have agreed to expedite work on relaxing visa formalities for business people to expand regional trade.
Addressing the demand of business community from South Asia Association for Regional Cooperation (SAARC), ministers last Thursday agreed to take necessary steps to relax visa regime in the region.
Representatives of SAARC Chamber of Commerce and Industries have been pressing for relaxation of visa regime in the region.
The issue of relaxing business visa was discussed at the 7th meeting of South Asia Free Trade Agreement (SAFTA) Ministerial Council held in Islamabad last week, according to Naindra Prasad Upadhaya, joint-secretary of the Ministry of Commerce and Supplies (MoCS).
"Visa relaxation for business people will increase mobility and hence benefit regional trade," he told Republica on Tuesday.
The ministerial meeting also expressed commitment to strengthen road, rail and air connectivity in the region.
"This will help facilitate regional trade of landlocked countries like Nepal," Upadhyay added.
SAFTA member countries are also in the process of reducing the list of sensitive goods. "We have started to share the ´offer and request letter´ among countries to reduce the list of sensitive goods," Upadhaya added.
Upadhaya, however, refused to disclose the goods that that the government is reducing from the sensitive list.
Economics, finance, trade, investment, inclusive economic development and political economy of public policy
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Tuesday, February 21, 2012
SAARC nations agree to liberalize visa regime
Unsatisfactory performance of 'success story products'
Nepal´s priority export items,
which are enlisted as success stories by the Enhanced Integrated
Framework (EIF), an initiative of World Trade Organization (WTO), have
not performed well in terms of export volume.
Ginger, tea and Pashmina products are included in Nepal Trade Integration Strategy (NTIS) - the government blueprint for export promotion - have been selected as model products in Nepal by the WTO stating that they have replicable performance and prospect for exports.
Statistics compiled by Trade and Export Promotion Center (TEPC) shows export of ginger, for which Nepal is the fourth-largest producer in the world, saw a whopping decline of 38.2 percent to Rs 281.94 million during fiscal year 2010/2011 compared to a year-ago period. Data shows export of ginger went up by 13 percent to Rs 456.01 million in 2009/2010 compared to a year-ago period. TEPC data shows India, Japan, USA, Pakistan, and the Netherlands are major importers of Nepali ginger.
Despite a double-digit growth in Pashmina exports, inconsistency in export volume, weak quality control, and nominal production of domestic raw material are still serious bottlenecks for Pashmina exports. Due to lack of brand awareness of Nepali Chyangra Pashmina in the international market, export volume couldn´t go up to the desired level.
Pashmina export went up by impressive 24.2 percent in 2010/2011 compared to a year-ago period. However, exports plummeted by whopping 27.6 percent during 2009/10 compared to a year-ago period. Nepali Pashmina is being exported mainly to Japan, France, Germany and USA.
Officials at the Ministry of Commerce and Supply (MoCS) admitted lack of effective mechanism to assure quality and high dependence on imports for necessary raw materials are major factors for uncertain prospects of Pashmina exports despite some positive developments in recent months.
“Though Nepali Chyangra Pashmina trademark has been registered, we still have a long way to go to win the trust of international buyers. Dependence on other countries for raw material is another problem in the Pashmina sector,” said Jib Raj Koirala, under-secretary at MoCS.
According to TEPC, tea export has gone up in 2010/2011 by 29.7 percent compared to a year-ago period. Export of tea declined by 3.7 percent in 2009/2010 compared to a year-ago period.
Officials however claimed performance of any product shouldn´t be judged on the basis of export volume alone.
Ginger, tea and Pashmina products are included in Nepal Trade Integration Strategy (NTIS) - the government blueprint for export promotion - have been selected as model products in Nepal by the WTO stating that they have replicable performance and prospect for exports.
Statistics compiled by Trade and Export Promotion Center (TEPC) shows export of ginger, for which Nepal is the fourth-largest producer in the world, saw a whopping decline of 38.2 percent to Rs 281.94 million during fiscal year 2010/2011 compared to a year-ago period. Data shows export of ginger went up by 13 percent to Rs 456.01 million in 2009/2010 compared to a year-ago period. TEPC data shows India, Japan, USA, Pakistan, and the Netherlands are major importers of Nepali ginger.
Despite a double-digit growth in Pashmina exports, inconsistency in export volume, weak quality control, and nominal production of domestic raw material are still serious bottlenecks for Pashmina exports. Due to lack of brand awareness of Nepali Chyangra Pashmina in the international market, export volume couldn´t go up to the desired level.
Pashmina export went up by impressive 24.2 percent in 2010/2011 compared to a year-ago period. However, exports plummeted by whopping 27.6 percent during 2009/10 compared to a year-ago period. Nepali Pashmina is being exported mainly to Japan, France, Germany and USA.
Officials at the Ministry of Commerce and Supply (MoCS) admitted lack of effective mechanism to assure quality and high dependence on imports for necessary raw materials are major factors for uncertain prospects of Pashmina exports despite some positive developments in recent months.
“Though Nepali Chyangra Pashmina trademark has been registered, we still have a long way to go to win the trust of international buyers. Dependence on other countries for raw material is another problem in the Pashmina sector,” said Jib Raj Koirala, under-secretary at MoCS.
According to TEPC, tea export has gone up in 2010/2011 by 29.7 percent compared to a year-ago period. Export of tea declined by 3.7 percent in 2009/2010 compared to a year-ago period.
Officials however claimed performance of any product shouldn´t be judged on the basis of export volume alone.
Slew of tax incentives proposed to boost industrial production
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.