Bankers hope for investment-friendly budget to manage liquidity -Demand 'fair' rates in corporate tax
Bankers and financial experts have said that the upcoming budget should create conducive environment for boosting investment to resolve the problem of excessive liquidity seen in the financial system. As the government is all set to present its budget for the fiscal year 2014/15 in parliament in the first week of June, they have also hailed the government attempt to bring the budget on time.
“Unlike during the past fiscal years when the budget would be delayed by months, this budget is going to be tabled in parliament for deliberations by the lawmakers. Timely endorsement of the budget holds great significance for the BFIs. If the budget comes on time, the government spending also goes up which helps sustain the BFIs,” Upendra Poudyal, vice president of Nepal Bankers Association (NBA), told Republica, adding that an investment-friendly budget will boost the confidence of investors to start new projects.
He also said the government should now shift its focus from the underachiever sectors to the sectors where spending was good in the earlier fiscal years. “Why concentrate more budget in the underachieving sectors. Rather, such spending should be shifted toward the infrastructure projects where the possibility of spending is higher,” said, Poudyal, who is also the CEO of NMB Bank.
Bhuvan Dahal, CEO of Sanima Bank, also echoed Poudyal. “The government should put its effort to expedite mega projects of long-term significance,” Dahal said, adding, “The government should issue bonds to finance such projects which will help the banks to manage their liquidity surplus by making investments in such development funds. This will also benefit the government as the government will get funds at low interest rates due to the higher liquidity in the banking system.”
Dr Rewat Bahadur Karki, a banking expert, said the budget should create the environment for investment so that the lending of the BFIs goes up. “The budget should boost investor confidence so that more investment is made in the hydro, energy and other sectors. Also, the government should encourage the BFIs to lend in the productive sectors by offering incentives and subsidies instead of making such lending mandatory,” he added.
Karki also advised the government to make its stance clear on the opening of new banks in the new budget. “It´s not clear whether the government wants financial liberalization or strict regulations. Some of the provisions of the central bank show that it is heading for more regulatory direction,” he said, calling for the central bank to allow opening of new BFIs.
“Under the liberalized system, the government can introduce some conditions for licensing BFIs, but it cannot stop licensing,” he added.
The bankers have also said that they seek ´fair´ treatment in terms of imposition of corporate tax on the BFIs. “While the government is charging 25 percent corporate tax to others, it is imposing 30 percent to the BFIs. The tax should be brought down to 25 percent for the BFIs,” said NBA Vice-President Poudyal.
While the BFIs are rushing for mergers, the bankers have also said that the budget should announce tax incentives for the merged entity. “There should be more incentives for the merged BFIs if the government wants to encourage mergers,” said Chandra Dhakal, chairman of Global IME Bank.
source: republica,31 may 2013
LINK
“Unlike during the past fiscal years when the budget would be delayed by months, this budget is going to be tabled in parliament for deliberations by the lawmakers. Timely endorsement of the budget holds great significance for the BFIs. If the budget comes on time, the government spending also goes up which helps sustain the BFIs,” Upendra Poudyal, vice president of Nepal Bankers Association (NBA), told Republica, adding that an investment-friendly budget will boost the confidence of investors to start new projects.
He also said the government should now shift its focus from the underachiever sectors to the sectors where spending was good in the earlier fiscal years. “Why concentrate more budget in the underachieving sectors. Rather, such spending should be shifted toward the infrastructure projects where the possibility of spending is higher,” said, Poudyal, who is also the CEO of NMB Bank.
Bhuvan Dahal, CEO of Sanima Bank, also echoed Poudyal. “The government should put its effort to expedite mega projects of long-term significance,” Dahal said, adding, “The government should issue bonds to finance such projects which will help the banks to manage their liquidity surplus by making investments in such development funds. This will also benefit the government as the government will get funds at low interest rates due to the higher liquidity in the banking system.”
Dr Rewat Bahadur Karki, a banking expert, said the budget should create the environment for investment so that the lending of the BFIs goes up. “The budget should boost investor confidence so that more investment is made in the hydro, energy and other sectors. Also, the government should encourage the BFIs to lend in the productive sectors by offering incentives and subsidies instead of making such lending mandatory,” he added.
Karki also advised the government to make its stance clear on the opening of new banks in the new budget. “It´s not clear whether the government wants financial liberalization or strict regulations. Some of the provisions of the central bank show that it is heading for more regulatory direction,” he said, calling for the central bank to allow opening of new BFIs.
“Under the liberalized system, the government can introduce some conditions for licensing BFIs, but it cannot stop licensing,” he added.
The bankers have also said that they seek ´fair´ treatment in terms of imposition of corporate tax on the BFIs. “While the government is charging 25 percent corporate tax to others, it is imposing 30 percent to the BFIs. The tax should be brought down to 25 percent for the BFIs,” said NBA Vice-President Poudyal.
While the BFIs are rushing for mergers, the bankers have also said that the budget should announce tax incentives for the merged entity. “There should be more incentives for the merged BFIs if the government wants to encourage mergers,” said Chandra Dhakal, chairman of Global IME Bank.
source: republica,31 may 2013
LINK
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