By Ramesh Lamsal
The government is preparing to bring the budget for the upcoming fiscal year focusing on the measures to mitigate coronavirus impact on the economy.
According to Finance Minister Dr. Yuba Raj Khatiwada, the government is engaged in the budget preparation by mobilizing international assistance when a significant fall has been predicted in the revenue collection and remittances in the wake of the global pandemic of COVID-19.
The Finance Committee under the Federal Parliament today discussed the upcoming budget issues. Finance Minister Dr. Khatiwada briefed the meeting about the country’s overall economic state.
Stating that the government had lately focused on the mobilization of international aid, he said commitments from donors for the same were encouraging.
According to him, an agreement for international assistance equivalent to Rs 150 billion has been disbursed to work in the areas of health, infrastructure development, and relief distribution efforts. ”Some new agreements are in the pipeline.”
”Mobilization of foreign aid is in the priority to cope with a fall in internal revenue collection”, he added.
The Government Spokesperson furthered that the decision to suspend international flights and close border points turned out to be a timely step as it helped to mitigate the risk of COVID-19.
EMPHASIS ON THE PROCUREMENT OF MEDICAL EQUIPMENT
The Minister said the government accorded top priority to the purchase of medical items essential to fight against the coronavirus. Besides, special attention had been given to the effective and efficient mobilization of the health workforce during the coronavirus crisis. As he said, the Health Ministry does not need to face a budget issue. Rs 1.8 million have been already allocated to the Home Ministry and Rs 2.2 billion through the Ministry of Defense to purchase medical equipment to fight against the crisis.
So far Rs 2.2 billion has been deposited to the fund set up by the government to prevent, control and treat the coronavirus. The government has contributed Rs 500 million to the fund. The funds are being spent in the rescue works and procurement of medical assistance materials as well as given to the local levels to combat the virus.
The government has set a provision preventing the establishment of funds rampantly for the distribution of rescue and relief distribution.
Amounts collected to distribute reliefs to virus victims by any sector should be deposited to a fund set up by the government within seven days, according to the provision.
REVENUE COLLECTION AFFECTED
Revenue collection has been affected due to international borders with Nepal and trade being shut down over COVID-19 pandemic, said Minister Dr. Khatiwada. Import displacement, a halt in the import of luxurious products and slight changes in custom rates have created pressure on revenue collection, he said. Eighty percent revenue of the collection target has been collected until April 12, he said. “Not only customs. Value-added tax and taxes under different subjects have been affected.” Until April 12 in the current fiscal year, 2076/77, Rs 488 billion has been spent, which is 51 percent of the annual target. Likewise, under capital expenditure, Rs 105 billion has been spent, which is 26 percent of the annual target. Likewise, under financial management, Rs 84 billion has been spent, which is 50 percent of the target.
SIZE OF RENEWED LOAN INCREASES
The government has increased the size of renewed loan to Rs 1 trillion from earlier Rs 60 million. It is believed that this could provide a huge relief to the stakeholders concerned.
Minister Khatiwada shared that the government has introduced some relief packages related to tax and revenue collection sector. The deadline for tax payment has been extended to May 7 from earlier April 7. Likewise, the timeline for other taxes payment has been extended to June 7. The new fiscal year budget to be introduced on May 28 is likely to bring up slew of relief packages and measures to reinvigorate the economy hit hard by COVID-19 and lockdown.
The new measures include tax exemption in the medicines and other medical goods, exemption of tax in the registration of the company and operational charge and consideration for the delay in tax payment.
Also, the time for paying premium for insurance has been extended. Similarly, the companies listed in the Securities Board of Nepal which ought to submit their details could do the needful by mid-July.