Japan signals support to private sector development

KATHMANDU, OCT 1

Japan, a major development partner of Nepal, has hinted at the introduction of assistance for private sector development in Nepal through its official development assistance (ODA).

“We want private sectors of both Nepal and Japan to work together and series of meetings have already been held so far to seek areas of cooperation for the development of Nepal´s private sector. We are also interested to support private sector in Nepal through ODA,” said Kunio Takahashi, ambassador of Japan for Nepal.

In a meeting with the private sector leaders on Sunday, Takahashi said that the Japanese government has been evaluating the effectiveness of existing ODA for Nepal.

Ambassador Takahashi also revealed that Professor Ryokichi Hirono of Seikei University of Japan was carrying out the evaluation of the ODA.

The Japanese embassy had initiated process of establishing a forum of private sector of the two countries few months back. However, the process couldn´t go ahead after abrupt political change in Nepal following the dissolution of Constituent Assembly in May.

“We are again working on establishing a forum for private sectors of the two countries,” Takahashi said.

A meeting held among Takahashi, Prog Hirono and Suraj Vaidya, president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI) focused on the role of private sector and prospects of investment in the country.

On the occasion, Professor Hirono, called for increased saving at people level to increase investment source within the country as evidenced in Japan,Singapore and Thailand.

“There should be saving in people´s side and that should come as a sustainable investment source in the country,” Hirono said.

He categorically identified five core areas-- political stability, investment in human capital development, saving of the people, policy consistency in the government and collaboration among stakeholders of development as the crucial sector for development.

He also stressed on the need for collaboration among five major stakeholders such as government, business people, labor unions, consumers and academics to successfully implement the development efforts.

Vaidya, said the government should bring a full-fledged budget irrespective of any political situation in the country to ensure the proper utilization of foreign assistance.

Prof Hirono also suggested that the government issues national bond in order to utilize the remittance that the country receives from overseas workers.

“Issuing national bond could be a better instrument to streamline the remittance money in the productive sector of the country,” Hirono said.

Japan government, through Japan International Cooperation Agency (JICA) has been assisting Nepal in areas such as infrastructure development, power generation, water supply, improving public administration, education and health among others.

According to Ministry of Finance, Japan extended cooperation worth Rs 30 billion during 2001 to 2010 in three sectors-to support transport infrastructure, power generation and water supply in Nepal

Source: Republica

Nepal eyes DTAA with US, Japan, Russia

KATHMANDU, March 17, 2012

Ministry of Finance (MoF) has initiated steps to sign Double Taxation Avoidance Agreement (DTAA) with three major countries in a bid to lure investors by assuring them that they will not be required to pay taxes in their country if they pay it in Nepal.

“We have already entrusted concerned officials to come up with drafts of the DTAA within a month,” said Finance Secretary Krishna Hari Baskota. Once those are developed, he said the government will formally exchange them with the United States, Japan and Russia and start negotiations to give them final shape for signing.

The initiative is part of government efforts to create better investment environment and bilateral friendly tax regime.

DTAA is considered crucial to gain the confidence of foreign investors as it allows investors with businesses in Nepal to obtain tax credit in their country for tax they have paid here.

Japanese business delegating visiting Nepal in the past have suggested the Nepali private sector to convince the government to sign the DTAA if they wanted to lure more Japanese investment partners in Nepal. In the absence of such an agreement, they say interested Japanese investors were not putting in their money in Nepal, as they would have to pay taxes both in Nepal and Japan.

Similar demand had come from a delegation of the US investors, who visited Nepal last year.

“It is considering their demands that we have decided to move ahead with the DTAA with the US, Japan as well as Russia in the first phase,” said Baskota.

The initiative is in line with the Immediate Action Plan (IAP) for Economic Growth and Prosperity that Prime Minister Baburam Bhattarai announced in January this year. In the IAP, he said the government will sign DTAA along with Bilateral Investment Promotion and Protection Agreement (BIPPA) with China, SAARC countries and 5 other developed nations by the end of this fiscal year.

The PM had drawn up the plan in view of the Investment Year, when he said the government is hoping to bring in US$ 1 billion from the overseas investors. To realize the plan, the government has assigned the Investment Board to develop 50 bankable investment projects in areas such as infrastructure, hydropower, tourism and agriculture, so that it could be offered to foreign investors.

As clear identification of projects will not be enough, the government is hopeful that signing of DTAA and BIPA with potential investment generating countries will create further attractions for investors to put their money in Nepal.

Source: Republica