Potato and Onion traders launch strike, blaming government for VAT woes

KATHMANDU: Businessmen involved in the potato and onion trade have initiated a strike, attributing their distress to the government’s imposition of Value Added Tax (VAT). The ongoing strike heightens the concern of a potential scarcity of onions and potatoes in the market.

Initially, the budget announcement indicated that VAT would exclusively apply to imported potatoes and onions. However, traders now allege that VAT has been extended to transactions involving goods purchased from local farmers.

Prakash Gajurel, the General Secretary of the Potato and Onion Traders Association, emphasized that the imposition of VAT has rendered potato and onion businesses nonviable. Gajurel holds the Inland Revenue Office responsible for monitoring and penalizing businesses for not registering for VAT.

“We have reached a point where conducting business has become unfeasible due to the addition of VAT to domestic products,” remarked Gajurel. In the current fiscal year’s budget, the government decided to impose a 13 percent value-added tax on potato and onion transactions, despite opposition during the budget announcement.

According to the Kalimati Fruits and Vegetables Market Development Committee, traders nationwide have ceased selling potatoes and onions for almost three days. Binay Shrestha, the committee’s information officer, reported a lack of potato and onion imports in the market, leading to empty stalls.

“There are no potatoes and onions in Kalimati,” Shrestha noted. “I don’t know the reason, but the businessmen have not brought potatoes and onions into the market.” The committee stated that, with no potatoes and onions available, market prices have not been determined. Approximately 200 wholesalers in the Kalimati market alone are engaged in the potato and onion business.

The ongoing strike by businessmen has resulted in a decline in potato and onion prices in the market. Citing the shortage as the reason, traders have set prices arbitrarily.

The Ministry of Agriculture and Livestock Development has stated its lack of awareness regarding potato and onion sales in the market. Sabnam Siwakoti, Joint Secretary and Spokesperson of the Ministry, mentioned receiving a letter on Tuesday from the Farmers’ Committee of Kalimati Bazar, seeking assistance for businessmen facing VAT issues.

In this year’s budget, VAT is only applied to imported potatoes and onions, but the letter mentions easing VAT on domestic products as well,” explained spokesperson Siwakoti, noting that the ministry will closely monitor the market.