This Project briefly explain how Government of Nepal Spends and Estimate Its Budget and What are the Sources of Its Revenue for the year of 2072-73. (2016-2017)

1. NEPAL BUDGET
2016-17

2. “A document presenting the
government's
proposed revenues and spending
for a financial year that is often
passed by the legislature,
approved by the president and
presented by the Finance
Minister to the nation.”

3. INTRODUCTION
• The Hon’ble Finance Minister, Mr. Bishnu Prasad Paudel
presented annual budget.
• It was announced on Saturday, Jestha 15, 2073 (May 28, 2016)
for the financial year 2073/74 (2016-17) through Finance Bill,
2073.
• Budget of Rs. 1048.92 billion (PY 819.46 billion) was
presented.
• The GDP growth is estimated at 6.5% (PY estimated 6% but
achieved 0.77%) and inflation rate at 7.5% (PY 7%).

4. BUDGET EXPENDITURE

5. SOURCE OF REVENUE

6. GOVERNMENT REVENUE
• Tax revenue
a) Custom Duty
b) Land Revenue and
registration tax
c) Taxes on property
profit and income
d) Domestic taxes on
goods and services
• Non Tax Revenue
a) Fees
b) Escheat
c) Fines and penalties
d) Income from public
enterprises
e) Foreign Grants

7. TAX REVENUE
1. DIRECT TAX
• Income Tax
 1% tax rate for income upto Rs 4 lakh(if married) and upto Rs 3lakh
fifty thousand (for unmarried).
 For next 1 lakh Rupees 15% tax rate.
 For income till 25 lakh 25% tax rate.
 For income over 25 lakh 40% tax rate.
 For non residents of Nepal on any income amount 25% tax rate is
applicable.
 Income from non chargeable business assets i.e 2.5%(land and
building held for more than 5%) and 5%(land and building held for
more than 5 years).
 10% tax on sale of share of unlisted entity and 5% if it is listed entity.

8. ….contd
2. Indirect Taxes
 Tax rise in beer, spirit and cigarette.
 Customs duty on import of machinery and equipment needed for
Agriculture, Irrigation and Livestock reduced to 1%.
 Import tax also reduced for electric public and private transport
vehicle; vehicles used for transport of milk, meat and fish transport,
Gas bullet.
 Customs duty on import of certain medicines reduced.
 50% excise duty exemption on production of Motorcycle and 25% on
production of other vehicles continues.
 No Excise Duty is attracted on Electric Vehicle is continued.

9. ….contd
• VAT shall be exempted on imports of such machinery,
equipment, tools and their spare parts, penstock pipes
or iron sheets used in making thereof as required for
hydro power.
• Penalty of Rs. 20,000 per visit if not allowing to inspect
the VAT records to the tax officer.
• Sale of Raw Material and Manufactured Goods to
industries operating in Special Economic Zone,
established under prevalent Law, shall be taxed at 0%.
• No Custom duty on mobile.
• Custom duty on LP Gas -5% continues

10. GOVERNMENT EXPENDITURE
• Budget priority sector
A. Reconstruction, rehabilitation and new construction
B. Hydro-electricity production, distribution cable
installment and distribution
C. Road, Airport and Irrigation
D. Agriculture, industry, tourism and forest
E. City and local infrastructure
F. Education, health, drinking water and sanitation
G. Social security, corruption control, service
mobilization and improvement in administration

11. KEY HIGHLIGHTS
• Post quake reconstruction
 Rs 140.66 billion is allocated for reconstruction.
 Interest free loan of Rs 300,000 for each households affected by
the earthquake.
• Electricity
 Plans to end load shedding within 2 years; self reliant within 3
years and start export of electricity within 10 years.
 Plans to produce 6,000 MW electricity from river flow and
4,000 MW from water reservoir within 10 years.
 Public private share program to invest in hydro-projects with
51% government and 49% general public.

12. ….contd
• Road Construction
 Rs 10 billion allocated for Budhune-Hetauda section
construction part of the Kathmandu-Nijgad duel carriage
Highway.
 Rs 4.20 billion allocated for Postal Highway; 518 km dedicated
double lane within 3 years; 1152 km second phase to start
coming fiscal year.
 East-West Highway: Rs 2 billion allocated for 4 lane modern
road connecting southern borders via district head quarters.
 Prithivi Highway: Rs 1.86 billion allocated for Nagdhunga
Tunnel.

13. ….contd
• Transportation
 Introduction of high security embossed number plate and
vehicle fitness test.
 Smart card driving license and registration.
 Mandatory digital taxi meters.
• Urban development
 Rs 9 billion allocated for city development (road, sewage system,
drinking water, renewable energy, bus park, fun park, education,
health).
 Rs 1.72 billion allocated for building homes for backward community
(Dalit, Muslim, Chepang, Rautay, Gandharba, Badi, Bankariya, Surel
and Thami). 20,000 homes to be built.
 Rs 710 million allocated to develop 5 of the poorest VDCs in Bajura
district.

14. ….contd
• Agriculture
 Rs 5.78 billion allocated for Prime Minister’s agricultural
modernization program.
 Agriculture sector to be divided into pocket area, zone and super
zone.
 Rs 5.47 billion allocated for bio/chemical fertilizer industry aid.
 Rs 8.46 billion allocated for animal production and self reliance
program.
• Tourism
 Year 2073 BS to be declared domestic tourism year;
preparation to declare year 2018 AD as Nepal Visit Year.
 Plan to bring Gautam Buddha Int’l Airport in operation by
2074 BS Magh month. Rs 7.22 billion budget allocated.
 Rs 5 billion allocated for Pokhara Regional International
Airport construction. Rs 1.5 billion allocated for proposed
Nijgadh Int’l Airport.

15. ….contd
• Benefit scheme
 Benefit for elderly, disabled etc doubled.
 Journalists to get 50% discount at government hospitals.
• Education
 Rs 26.50 billion allocated for School development.
 Loan facility with academic certificate as collateral.
• Sports
 Rs 200 million allocated for the 7th National Sport.

16. ….contd
• Drinking water
 Plan to start distributing drinking water from Melamchi by 2074 BS
Asoj month. Budget of Rs 5.98 billion allocated.
 Rs 8.03 billion allocated for other drinking water projects around the
country.
• Health
 Rs 2.50 billion allocated to implement National Health Insurance. Rs 1 billion
allocated to provide free treatment (8 different illnesses) of impoverished
citizens.
 Treatment of Heart, Kidney and Liver disease; and Cancer to be free for the
impoverished at government hospitals. Dialysis facility free until Kidney
transplant.
 As per “One Village One Doctor” initiative, village students passing entrance
exam to get MBBS scholarships with a condition that they must serve in the
village for five years after completion of their education.

17. Estimation of total
expenditure
Priority establishment
Discussion
Preparation and
selection of new projectsProposal of new taxes
Final document
Authorization and
implementation
BUDGET FORMATION PROCESS

18. BUDGET HISTORY

19. THANK YOU