Kathmandu, Nepal, March 8, 2010—
IFC, a member of the World Bank Group, is working with Nepal’s Ministry of Finance and the Inland Revenue Department to assess requirements and identify areas of support on tax reforms that will help reduce administrative burden, broaden the tax base, and improve operations for Nepalese companies.
An IFC team visited Nepal earlier this month on a tax-scoping mission as part of the Global Tax Simplification Program. The project, focusing specifically on the needs of small and medium enterprises, will work to improve public awareness on tax reforms and expand outreach to taxpayers.
“We welcome IFC’s partnership to work on reforms that will reduce the cost of complying with tax policies and procedures and improve the efficiency of our tax system, said Krishna Hari Baskota, Secretary of Revenue, Ministry of Finance. “This will benefit local businesses, generate higher investment, and help make Nepal’s tax administration more competitive globally.” The ministry has an ambitious target of raising revenues from the current 15.1 percent to 20 percent of Gross Domestic Product in the next few years.
The Global Tax Simplification Program has two parallel work streams—technical solutions to simplify systems of taxation and a knowledge management program designed to enable governments to approach key issues facing tax simplification related to tax for small and medium enterprises, sector-specific tax, value-added tax, tax administration, and tax incentives. The program introduces a new approach to tax reforms by focusing on how businesses are affected by the tax system. By streamlining business taxation, the program sets out to broaden the tax base, reduce informality, and spur growth and investment.
“The Nepalese government is committed to tax reforms and we are happy to offer advisory support and expertise to further improve the country’s business environment for small and medium enterprises,” said Albena Melin, Programme Coordinator for Nepal Investment Climate Program, IFC Advisory Services in South Asia.
Nepal, which ranks 124
th
out of 183 economies on paying taxes in the World Bank Group’s
Doing Business 2011
report, has significant scope to improve the ranking on paying taxes.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totalled $18 billion in fiscal 2010, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org
.
