Ex-FinMins against drastic changes in tax rates, prefer full budget

FORMER finance ministers have said that the current electoral government cannot make extensive changes in the tax structure in response to Finance Minister Shankar Koirala throwing around ambitious revenue figures. However, they were firmly in favour of introducing a full budget irrespective of the tenure of the current government. Speaking at an interaction on Wednesday, they said that the budget should be made in such a way that a future elected government could own it. UCPN (Maoist) leader and former finance minister Barsa Man Pun said that the electoral government could not change the tax rate drastically. He added that the budget should not go for forming a tax clearance commission which the government had planned to establish even in the past. While the government has been insisting on introducing a budget based on a fully liberal market economy, Pun warned that it could not give up the “three-pillar economy” that seeks to involve the government, private sector and cooperatives. Rastriya Prajatantra Party leader and former finance minister Prakash Chandra Lohani countered Pun saying that there might be many pillars of the economy which should not be cared about. “The budget must encourage the private sector to invest,” he added. CPN (UML) leader and former finance minister Bharat Mohan Adhikari asked the government not to change the tax rate but enforce the existing tax rate properly. He also suggested not introducing new programmes but focusing on implementing ongoing projects. Adhikari suggested that the budget should focus on increasing investment from all the actors including the government, private sector, cooperatives and foreign investment. “Capital budget spending and import substitution should be other priorities,” he said. Nepali Congress leader Prakash Sharan Mahat said that the government could not make a fundamental policy shift while introducing the budget. As far as taxation is concerned, he said that the current government should change the tax rate for products which need to be discouraged and which need to be promoted. With regard to a raise for government employees, a majority of former ministers were of the view that even though a hike in the salary is due, it should not affect the outside market adversely. A raise for government employees usually affects inflation, and it also puts pressure on the private sector to give a raise to its employees. Chief economic advisor at the Finance Ministry Chiranjeevi Nepal said that the government was positive about giving government employees a raise, but it was still looking for the extra resources required. A majority of former ministers were of the view that even though a hike in the salary is due, it should not affect the outside market adversely