Kathmandu. The government has announced a business revival package to restart industries, trade, businesses and economic activities affected by the Bhotekoshi floods. The Cabinet meeting held on Thursday decided to provide relief, tax exemption, customs duty waiver, loan and interest concession, and ease the payment of insurance claims for the flood-affected businessmen on the proposal of the Ministry of Finance.

The government has brought the package as part of the first phase of business revival after the devastating floods along the Nepal-China border on August 26 caused severe damage to industries, trade, business and transport sectors in Rasuwa, Nuwakot and Dhading districts.

Duty exemption on re-import of damaged commercial vehicles

The government has decided to provide relief to the owners of commercial vehicles and transport vehicles that have been damaged due to floods and have been swept away by the floods. The old registration of such vehicles and transport vehicles will be cancelled and all the customs duty will be waived while re-importing new vehicles of the same nature. The government hopes that this arrangement will help the businessmen who have lost their vehicles due to floods to buy new vehicles and resume their business.

Duty exemption on import of plant, machinery and equipment

All customs duty will be exempted from all customs duty on the re-import of plants, machinery, machinery and equipment destroyed due to floods, which cannot be repaired and repaired due to floods. Such exemption will be available for importing the plant, machinery, machinery and equipment destroyed by the floods of natural persons or bodies. However, the quantity of new imports will not exceed the amount destroyed by the floods. This provision is expected to make it easier for the businessmen who have lost expensive machinery and equipment used in industries and businesses to reinvest.

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The customs duty of imported goods destroyed before reaching the destination due to floods will also be adjusted. Importers who have already paid the duty to the customs office but have lost their goods before reaching their destination due to the floods of August 10 will be able to adjust the amount paid earlier while importing the same type of goods again. To get such a facility, the goods of the same nature will have to be imported from any customs office within six months in place of the destroyed goods.

Tax statement and tax filing deadline

The government has also extended the deadline for the affected businessmen to complete the tax process. The deadline for the affected taxpayers to submit tax returns and file taxes has been extended till November 10, 2008. This will provide relief to the taxpayers who have problems in the operation of offices, records, accounting system and business due to floods.

Value Addition Tax Claim of Damaged Property Easy

Similarly, the process of claim and adjustment of Value Added Tax (VAT) on commercial properties damaged by floods will also be simplified.

Similarly, a lump sum expenditure can be deducted on the value of a fully damaged commercial property. The limit under Section 16 (2) of the Income Tax Act will also not apply to the expenditure incurred on the repair of partially damaged property. This will make it easier for the flood-affected businessmen to adjust the expenditure incurred on the repair and rehabilitation of damaged buildings, equipment, machines and other commercial property for tax purposes.

Full exemption from income tax to the affected person

The people affected by the floods will get full exemption from income tax for the income year 2082/83. For this, the concerned affected person has to submit the prescribed details.

Local taxes and fees are also concession

The government has decided to request the state and local governments to provide concessions in local taxes and fees to the businessmen affected by the floods. It is expected that the cost of resumption of business will be reduced if the relief announced by the federal government provides concessions in taxes and fees from the provinces and local levels.

Bank loan restructuring and rescheduling

Arrangements have been made to restructure or reschedule the loans taken from banks and financial institutions of businessmen who have suffered financial losses due to floods. Arrangements have been made to restructure and reschedule the loans related to the loss of goods imported from Rasuwa Customs. The principal and interest of the bank loans of the flood-affected borrowers can also be restructured or re-tabulated once. This is expected to reduce the financial pressure of the businessmen who are unable to pay the installments and interest immediately.

Concessional Loan for Repurchase of Vehicles and Equipment

Concessional loans will be provided to the businessmen to repurchase vehicles, transport vehicles, machines and equipment damaged by the floods. The Nepal Rastra Bank will make necessary arrangements regarding such loans. Similarly, arrangements have been made to provide additional loans to the affected businessmen for the revival of industry and trade and protection of employment. A provision has been made to maintain the concessional interest rate by adding a maximum of 0.5 percentage points to the base rate for one year on the concessional loans received by the flood-affected businessmen. The government expects that this will provide comparatively cheaper loans to the businessmen to reinvest and manage the working capital of the business.

Insurance claim payment is also easy

The Insurance Authority of Nepal (NIA) has made special arrangements to make the payment of insurance claims for flood damages faster and easier. A surveyor will be deployed for the insurance claim evaluation of the damage through a simple process. Arrangements have been made to provide up to 50 percent advance claim payment to the insured on the basis of preliminary assessment. In order to end the long wait for the insurance amount to get the insurance amount to the businessmen who have suffered major damage due to floods, the summary claim payment procedure will be formulated and implemented soon.

CSR amount can be donated to Prime Minister’s Natural Disaster Relief Fund

The government has also made arrangements to encourage the private sector to contribute more to the relief and recovery of the disaster victims. The amount contributed by the agencies that have set up the Corporate Social Responsibility (CSR) Fund to the Prime Minister’s Natural Disaster Relief Fund in the financial year 2083/84 will also be recognized as CSR expenditure. For this, the concerned agencies will make arrangements to amend the relevant Acts, Rules and Guidelines as per the need.

According to the details made public by the Ministry of Finance, this package announced by the government is the first phase of the business revival plan. It has given priority to immediate relief, tax and duty exemption, tax concession, debt restructuring, concessional interest rates, new loans, insurance claim payment and CSR mobilization. The government has adopted a policy to reduce the financial and tax burden to restart the business establishments, industries, transport business, machines and equipment and imported goods due to the Bhotekoshi floods.

The government has given the responsibility of implementing the relief package to the Department of Customs, Inland Revenue Department, Nepal Rastra Bank and Nepal Insurance Authority. The government has said that it will also take further steps of the business revival plan with the aim of restoring the affected businesses and employment along with the immediate relief.