VAT on potato and onion fuels smuggling and market price increase in Nepal

Published 2023년 6월 23일

Tridge summary

The government's new tax system for the fiscal year 2023/24, which includes the imposition of value added tax (VAT) on certain foods like potato and onion, has led to a significant increase in the prices of essential goods. The high reliance on imported potatoes and onions, coupled with a decrease in their import, has further exacerbated the situation. As a result, consumers are bearing the brunt of these price hikes, while the government's revenue is expected to decrease and illegal trading of these items is likely to rise.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

KATHMANDU, June 23: The government’s unfair tax system implemented through the budget for the fiscal year 2023/24, has helped the market prices of a number of essential goods soar, say consumer rights activists. Speaking at a program on Thursday, consumer rights activists underscored that the government’s decision to impose value added tax (VAT) on a number of foods has caused the prices of the essentials to escalate. “While the government is rendering less priority to effective market monitoring, the imposition of VAT on kitchen items like onion and potato will drain more expenses of consumers,” said Jyoti Baniya, chairperson of the Consumer Welfare Protection Forum. The government through the budget had announced to remove 170 goods from the lists of goods receiving a VAT discount. These include potato and onion. With the provision in place, a number of vegetables, fruits and other food items now have to pay 9 percent agriculture service charge, 1.5 percent advance income tax ...

Source: Nagariknetwork