FNCCI urges government to declare ‘Investment Decade’ in upcoming budget

KATHMANDU: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has called on the government to declare the upcoming fiscal year as the start of an “Investment Decade” to address the nation’s economic challenges and chart a clear path for recovery. At a pre-budget interaction program held in Kathmandu on Sunday, the FNCCI emphasized the need for a budget that promotes a socially just open economy, supports the private sector, ensures structural reforms, strengthens governance, and enhances the effectiveness of capital expenditure.

FNCCI President Chandra Dhakal urged the government to introduce policies, programs, and a budget that boost private sector morale, stressing that even without political stability, policy consistency can drive economic progress. Highlighting the private sector’s role, Dhakal noted it contributes 81% to Nepal’s economy and 86% to employment, demanding formal recognition of its impact.

The FNCCI proposed creating an investment-friendly environment by reforming laws related to land, forestry, environment, public procurement, minerals, and hydropower, alongside introducing a unified investment law. It also suggested merging the Investment Board and the Department of Industry into a single, empowered entity to streamline processes.

The FNCCI advocated for a national initiative under the “Investment Decade” framework, including a “100 Startups, 100 Investors” campaign to promote startups and small-medium enterprises (SMEs). It recommended extending tax exemptions for startups by five years and facilitating online registration and concessional loans for SMEs.

To boost agricultural exports, the FNCCI proposed a “From Field to Gulf” program targeting Gulf nations, alongside establishing cold storage and warehouses at international airports and promoting Himalayan water exports through supportive policies.

The federation also called for promoting wedding and conference tourism, offering income tax exemptions for hill station hotels and educational institutions, and increasing domestic consumption of construction materials by encouraging paved roads.

It urged clarity on the modality of the proposed Nijgadh International Airport, private sector involvement in transmission line expansion, and the development of electric corridors. The FNCCI further recommended extending tax exemptions for power generation companies until 2092 (2035/36).

On fiscal policy, the FNCCI demanded a five-percentage-point reduction in corporate income tax for manufacturing industries over the next five years, tax exemptions on reinvestments, an increase in personal income tax thresholds, concessional VAT rates, and the abolition of the advance income tax system.

It also called for replacing the annual economic act with a unified revenue code to ensure stability in revenue policy, creating a legal framework for non-tax revenue, and ending frequent policy changes. The FNCCI stressed the need for better coordination with border security to curb unauthorized trade.

President Dhakal underscored that the government, domestic private sector, and foreign investment are the pillars of development, urging their collaboration to create a clear roadmap for economic revival through the “Investment Decade” initiative. The FNCCI’s proposals aim to foster a robust economic recovery by addressing structural bottlenecks and enhancing private sector participation.