Govt to finalize ToR for soft loan from EIB

KATHMANDU, Feb 11, 2013

The government is holding negotiations with the European Investment Bank (EIB) next week to finalize terms and conditions for soft loan of US$ 70 million for the construction of 140 mega watts Tanahun Hydropower Project.

“A team from EIB is scheduled to visit Nepal next week to finalize the terms and conditions for the soft loan,” joint secretary at the Ministry of Finance (MoF) Madhu Marasini, who also heads the International Economic Cooperation Coordination Division (IECCD), told Republica.

The government has already arranged a total of US$ 300 million soft loan from Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA) for development of the project. “We will seek an additional US$ 70 million from EIB in the meeting scheduled for next week," Marasini said.
The government has already finalized terms and conditions for the soft loan with ADB and JICA. “The terms and conditions with EIB will be different from that of ADB and JICA,” said an official at the Ministry of Energy (MoE).

ADB has agreed to provide soft loan at 1.5 percent interest with 30 years of maturity period. Similarly, JICA has agreed to provide soft loan at 0.01 percent interest with 40 years of maturity period.

“The meeting with EIB team next week will dwell on finalizing interest rate and maturity period,” the official said. The second reservoir type hydropower project after Kulekhani will be developed by Nepal Electricity Authority (NEA) after the government arranges fund for the project.

Meanwhile, the government is also vying for a loan of US$ 30 million from Abu Dhabi Fund for Development (ADFD) for the development of the project. “ADFD has expressed interest in funding the Tanahun Hydropower Project. But any meeting with DFD has not been fixed so far,” said the official.

ADB, which is a lead funding partner, had provided US$ 25 million in grant assistance to prepare the detailed report (DPR) of the project. “The project design has been completed,” said project Chief Mahesh Prasad Acharya.

If everything goes as planned, the national pride project based in Bayas municipality of the Tanahu will start generating power by 2020. According to officials engaged in the negotiation process, ADB and JICA both also have taken Tanahun Hydro as a “prestige project”

Source: Republica

Develop detail digital profile of all taxpayers: MoF instructs IRD

KATHMANDU, Aug 2, 2012

Ministry of Finance (MoF) has instructed Inland Revenue Department (IRD) to develop digital profile of all taxpayers, incorporating their personal, professional and income details, and also carry out survey on rental tax in a bid to generate basic information for tightening knots against revenue evaders.

Under the digital profile, the Ministry has instructed the IRD to expedite its campaign of permanent account number (PAN), whose registration has already made mandatory for all income earners, irrespective of whether or not they need to pay tax.

Likewise, the Ministry has asked the department to mobilize its offices and taxpayers´ service centers to survey out presence of houses and other buildings in their areas, identify whether those are residential, semi-residential and commercial buildings, and whether owners have registered with the tax office and paying rental tax.

“Unless we have clear digital profile and survey we will not have basic details needed to expedite our vigilance and check revenue evasion,” said Finance Secretary Krishna Hari Baskota.

He informed Republica that the Ministry has already instructed the revenue administrators to incorporate the programs in their respective annual plan and devise strategies to implement them. The MoF has suggested them to update existing guidelines on PAN and rental tax if required to generate these basic information.

Officials said development of detailed digital profile of taxpayers was crucial to identify groups vulnerable to tax compliance. Similarly, rental tax is regarded as one of the least complied component.

“Going by our international commitments, we cannot rely on raising tax rates, but will need to widen tax base if we are to continue reaping growth in revenue collections,” said Baskota. “Hence, these steps are crucial for it will lead to widening of tax net.”

Addressing the senior revenue officials at a function on Wednesday, Baskota expressed concern over low revenue-GDP (gross domestic product) ratio which presently stands at 15.5 percent.

“We must raise it to 20 percent over the next few years if we are to maintain our capacity to smoothly execute service delivery and development priorities,” said he laying emphasis on the need to step up reforms and enhance tax enforcement.

Newly appointed acting Chief Secretary Lila Mani Paudyal expressed satisfaction over the latest rise in revenue collections. But he expressed concern over under invoicing that runs deep in import trade, local commodity trade and property transactions, among others.

“Under invoicing has always remained as one big challenge to the revenue administration. It must work collectively and devise ways to tackle it efficiently,” he stated.

At the program, Paudyal handed over award to Inland Revenue Office (IRO), Lalitpur, for delivering the best output among all IROs. IRO Biratnagar and Bharatpur too were felicitated for being second and third best. Likewise, Taxpayers´ Service Center (TSC) at Tripureswor won the outstanding performance award among all TSCs.

Source: Republica

Govt speeds up process for Nepal Telecom strategic partner

KATHMANDU, July 29 - 2012

The government has initiated the process to find a strategic partner for Nepal Telecom (NT) by forming a new committee under Ministry of Finance (MoF).

A recent secretary level meeting of the ministry decided to form the committee that will carry out necessary ground work to take the necessary steps for divesting state owned operator´s stake to foreign partner.

Although the government had decided to divest at least 26 percent of the NT´s share to a foreign partner, not a single imporatnt step had been carried so far in two-year of period. A committee formed about three months ago also failed to conduct a single meeting.

“A new committee will come into effect from Sunday which will be chaired by joint-secretary of Finance Ministry,” Khum Raj Punjali, the head of the corporation coordination division at the MoF said.

He said the new committee was being formed as the previous committee failed to carry out expected work for the strategic partner. "The meeting of the commitee has been re-scheduled for next week and we are hopeful it will yield necessary result in few weeks," he said.

Punjali said the committee will prepare a bid document, necessary terms and conditions to invite strategic partner and will be submitted to the Finance Ministry. "The name of the coordinator of the committee will be finalized by Sunday,” he said.

The six-member committee includes two officials from Nepal Telecom (NT) Surya Bhakta Pokharel and Rajesh Joshi, under secretary of Ministry of Information and Communications Saileja Regmi and under secretary from Ministry of Finance and Ministry of Law and Justice.

Although the privatization process of the operaor began in May, 2010 it failed to gain any momentum. The high-level taskforce has suggested the government to invite a strategic partner allowing the partner to own at least 26 percent equity shares.

The committee suggestion was based on growing competition against private operators and examples of state-owned operators in Bangladesh, Sri Lanka and Pakistan who have already welcomed strategic partner to survive the tough competition.

Privatization committee had formed a sub-committee under the coordination of Hari Rokka in May 2010 to find a strategic partner for the state-owned telecom operator along with other public enterprises. However, no praise worthy work was done in the lack of political consensus.

Source: Republica