Enjoy Tax Holiday in Banepa IT Park
To attract the investors to the IT Park at Banepa, the gov ernment is coming up with
a tax holiday scheme in the budget for the fiscal year that begins on mid-July 2008. According to Saroj Devkota, Vice Chairman of High Level Commission for Information Technology (HLCIT), the Ministry of Finance has agreed to provide five years of income tax holiday for the companies that locate in the Banepa IT Park.
The IT Park was lying vacant because software developers located within the Kathmandu valley did not like to shift there due to difficulty for their workers to travel all the way to Banepa on a daily basis.
The construction of IT Park was completed three years back with the investment of Rs. 280 million.
Javra software company of Netherlands had rented some of the area in the park about 18 months ago but it left it after six months complaining that it could not get the required bandwidth of 512 kilobyte per second. After that the commission made a number of efforts to cajole the private sector to use the park but in vain.
In India, the government had provided a tax holiday for 10 years initially to encourage the investors to use the IT Parks there though this facility is now reduced to five years only.
Transport Syndicates Crumbling in the West
The truck and tanker operators of Bheri Zone have agreed to disband their syndicates after the rest of the business community there called a general strike protesting against the syndicate system and the administration was forced to intervene.
The sysndicate system is legally prohibited in the country since a few years, but the transport operators in various parts including the capital are still practising it.
According to reports from Nepalgunj, the three parties – the administration, the business community and the transport operators – have reached a three-point agreement under which the administration will closely monitor the implementation of the promise of the transport operators to practice ‘healthy competition’.
Meanwhile, Kailali Chamber of Commerce and Industry has started protest programmes against the syndicate system of Seti-Mahakali Truck Operators Association. According to reports other eight Chambers of Commerce and Industry in the two zones have expressed solidarity with the Kailali chamber in the movement. Similary, the Pyuthan Chamber of Commerce and Industry too has started movement against transport syndicate in Rapti zone.
Pashmina Exporters Feel Warm
Nepal exported Pashmina worth Rs. 1.4 billion till mid-May of this fiscal year recording a 40 percent growth over the figure of the entire last year, according to the industry sources.
This has increased the hope that the total export of Pashmina by the end of the current fiscal year (mid-July) will record a 50 percent growth as the export figure for the remaining two months is estimated to be over Rs. 100 million, said Durga Thapa, General Secretary of Nepal Pashmina Industry Association.
"With the ongoing peace process, the importers are getting confident of timely delivery of their orders. This is one of the reasons for increase in export of Pashmina," said Thapa.
According to him, the export product mix has also undergone some changes. In the past, the major export item used to be Pashmina shawls whereas this year the share of Pashmina sweaters in the total export has increased substantially, according to him. The demand for Nepali Pashmina sweaters is particularly high in Germany and England.
Meanwhile, also the quality of Nepali Pashmina has improved, he says .
Nepali Bourse in Reforms Drive
Nepal Stock Exchange Ltd. (NEPSE) that operates the only bourse of the country has introduced some changes in its organisational structure and is preparing to come up with some new rules.
According to the NEPSE, as decided by the recent AGM of the company and approved by the Company Registrar’s Office, NEPSE is now a profit-oriented company and its Board of Directors will now have only seven members compared to nine in the past. With this the Board will not have representatives from the Securities Board of Nepal (SEBON) and the Nepal Stock Brokers Association. This change is introduced in a process to sell government-held shares of the company to the general public, says a source in NEPSE.
Together with this, NEPSE is also increasing its capital to Rs. 50 million from present Rs. 35 million. The additional capital will be used to modernise the exchange including installation of Central Depository System (CDS) that will facilitate paperless transaction and settlement of share trading.
Meanwhile, NEPSE is preparing to come up with a number of further reforms in its system. Accordingly, it revising its rules so that the companies listed in its floor will be categorised in four (A, B, G and Z). Similarly, it is also coming up with rules to open its floor for trading on ‘rights’ to buy right shares issued by the companies. The revised rules are waiting approval from the authorities concerned, says the source indicating to the SEBON and Ministry of Finance.
Nepse is also planning to start share trading at four other cities-Biratnagar, Birgunj, Bhairahawa and Nepalgunj.
Only last month, NEPSE had set up an over-the-counter trading system to allow buying and selling of scrips delisted from its floor.
NRB to RAP banks
Nepal Rastra Bank is all set to tighten its regulation on the banks and financial institutions. For this the central bank has developed a new set of rules called Rapid Action Plan (RAP) to be followed by the institutions.
Notified recently to the banks, the new rules come into force from October 17 and their adherence will be monitored strictly. Under the new rules, NRB teams that make on-the-site visit of the banks and financial institutions for monitoring are granted authority even to cancel the registration of the bank found not adhering to the NRB directives.
Under the new rules, the milder actions that the inspection teams can take against the recalcitrant banks are stopping the banks from collecting deposits, advancing loans and expansion of branches. It also authorizes the inspectors to sack a director or the entire board if necessary, says the NRB source.
RAP requires every bank and financial institutions to submit its overall financial details to the Central Bank every month instead of every three months under the current provision. Moreover, it also has a provision under which the banks and financial institutions can be asked to submit to NRB the entire details of the accounts anytime the NRB feels necessary. "We have already prepared the regulations under RAP and issued circulars to all the banks" says Deputy Governor of Nepal Rastra Bank, Bir Bikram Rayamajhi. "RAP will strengthen the Nepali banks to compete with the international banks," he further says.
Normally, departments of NRB issue the circulars and directives. However, the RAP is approved by the NRB governing board itself.
Ami Apparels & Vishal
Mega Mart sign biz agmt
India ’s Vishal Mega Mart has signed agreement with Nepal’s Ami Appar-els to source readymade garments from the latter into India. Under the agreement, the Indian firm will help Ami to set up 2,000 machines and purchase the entire production from these machines. According to Prashant Pokharel of Ami Apparels who signed the agreement with Dipu Gupta of Vishal Mega Mart, installation of new machines will start from September at Ami’s Kathmandu and Biratnagar facilities .
FNCCI starts
Nationwide Industrial Survey
Federation of Nepalese Cham -bers of Commerce and Indus-try has started an intensive nationwide industrial survey, probably the first of its kind in Nepal. This survey aims at identifying and solving the problems of the industries, says one high official of the Federation. Being conducted with financial assistance from International Labour Organization (ILO), Asian Development Bank and UK Department for International Development (DFID), the survey report is planned to be made public by 15 th August 2008. At present questionnaires are being sent out to industrial units all over Nepal and the source says 700 units have already received the questionnaires. The questionnaires consist of around a dozen issues ranging from the cost, production and market conditions to frequency of labour unrest, tax payments and behaviour of the tax officers.
