CNI submits recommendations to Finance Minister for upcoming budget

KATHMANDU: Confederation of Nepalese Industries (CNI) has submitted recommendations to Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel for the budget for fiscal year 2025/26. 

The organisation urged the government to recognise the private sector as the engine of development and to ensure stable economic policies for the next 10 years to boost investment.

Presenting the proposals on behalf of the CNI, President Rajesh Kumar Agrawal stressed the need to create an investment‐friendly environment under the principle of “Anything for Prosperity.” “We need the next decade to be declared an investment period and our policies to promote economic growth,” he said and added that moderate import regulation coupled with concessions for domestic production would foster self-reliance. He mentioned that the CNI has submitted a list of goods with self-reliance potential to the Ministry of Finance.

The CNI recommended amending sub-section (D) of section 25 of the Industrial Enterprises Act, 2076 (2020), increasing the required customs duty difference on raw materials from one level lower to at least two levels lower than that on finished products. It also proposed consolidating existing taxes—income tax, customs duties, inland revenue tax and VAT—into a streamlined system. Other suggestions include making VAT multirated (0, 5, 13 and 18%), lowering the VAT registration threshold and integrating tax collection into a single system.

The organisation called for stricter control at customs checkpoints to curb smuggling and unauthorised imports. It recommended enhanced inter-governmental coordination, abolition of customs reference manuals and enforcement of labelling requirements on imported goods. Furthermore, the CNI urged the government to introduce at least 100 mandatory quality standards for major imported products in the next fiscal year.

The CNI stressed the importance of implementing the Guidelines on the Use of Indigenous Goods in Public Bodies, 2081, and urged amendments to public procurement laws to increase the consumption of domestic goods. It also called for a review of strict policies on natural resource use and further legal reforms, including provisions for advance guarantees, debt recovery and the removal of duplications in the Income Tax Act.

To attract large-scale investment, the CNI proposed reducing the income tax rate on manufacturing profits to 10%, reinstating export and import tax exemptions for export-oriented industries, and creating a legal framework for a National Startup Incubation Centre in collaboration with the private sector. It further recommended supporting large infrastructure projects through public–private partnerships, citing models such as HAM, VGF, MRG and VCM, and urged that the budget prioritise key sectors including new industries, digital economy, energy, tourism, infrastructure, agriculture, education, health and sustainable resource management.

Minister Paudel acknowledged the recommendations, stating, “We are committed to adopting the necessary policies to stimulate growth.” He stated that while initial legal reforms have been completed, further measures will continue until private sector investments rise.

At the event, former CNI President Hari Bhakta Sharma urged the government to introduce a blueprint for policy reforms, while Immediate Past President Vishnu Kumar Agarwal suggested allowing the private sector to manage industrial areas under public–private partnerships. The event was attended by Revenue Secretary Dinesh Kumar Ghimire, CNI Governing Council member Shiv Ratan Sharda, Senior Vice President Birendra Raj Pandey, Vice Presidents Nirvana Chaudhary, Raj Bahadur Shah, Rohit Gupta, Amit More and Bhim Ghimire, among others.