The government proposes a 5 percent green tax on fuel and 5 percent tax on telecom services provided by the telecom operators. As the Finance Minister presented the budget report, 2014-15, in the National Assembly, he said tax measures are proposed to correct the persistent current account deficit faced by the economy.
Last year, a total of Nu. 7.4 billion worth of fuel was imported from India. Of the total, Nu. 5.6 billion was spent on import of diesel and Nu. 1.7 billion for petrol. The tax is proposed as the demand for fuel is always on rise, the report states.
Similarly, the government also proposed 5 percent sales tax on telecom services. It was proposed to broaden the tax base on domestic goods and services.
The government will also propose revising the existing sales tax, custom duty and green tax on various types of vehicles. This is to reduce the import of certain goods and curb the outflow of Indian rupees and convertible currencies.
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Other tax measures include exemption of small and micro businesses in rural areas from business income tax. This is to encourage and promote growth of small scale businesses through self-employing economic activities. It is also to alleviate poverty and reduce rural urban migration. Approximately, about 11,000 tax payers are expected to be benefitted from this incentive.
Another measure is to exempt interest income from personal income tax to encourage savings. It will serve as a tool which will influence improved liquidity in the financial institutions and allow increase lending.
The report also proposes revision of customs duty on medical supplies and aircraft spare parts. Currently, they are exempted under the fiscal incentives and Tax Act 2011.
