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The Ministry of Finance has made it clear that no change was made by the Finance Bill, 2080 BS regarding the capital gains tax meant for share market investors. A delegation of stock market investors visited the Finance Ministry today with their concerns over what they said was the imposition of an additional tax on the capital gains tax. During the meeting, the Ministry officials said the tax rate remained unchanged from the existing rates. The Ministry further issued a public notice to clarify the matter. As it said 5 percent or the 5.5 percent capital gains tax conditioned by the Bill in the stock market is the final tax rate.

The recovery in the Nepali tourism sector has continued with the rising numbers of foreign visitors in the country. According to the latest statistics from the Nepal Tourism Board (NTB), Nepal welcomed 77,703 foreign visitors in May. The tourist footfall in May 2023 is 99.20 percent compared to May 2019 when 78,329 foreigners visited Nepal. The tourist arrival has surged by 108.42 percent in the first five months of 2023. According to NTB, 404,231 tourists visited Nepal in the first five months of 2023 compared to 193,944 during the same period of 2022. Nepal welcomed 55,074 international visitors in January 73,255 in February, 99,426 in March, and 98,773 in April. While the number of Chinese visitors is gradually improving, Nepal received the highest number of tourists from India, the US, and the United Kingdom in April. According to NTB, 36,575 Indian tourists and 8,545 US visitors came to Nepal in May. The country welcomed 4,667 tourists from China, 2,927 tourists from the United Kingdom, 2,184 from Australia, 2,164 from Bangladesh, and 1,321 from Malaysia. There has been a significant improvement in tourist arrivals this year, but the number is yet to touch the pre-Covid level. Nepal received 498,775 tourists in the first five months of 2019. The arrival of foreigners in the first five months of 2023 is 81.04 percent compared to the same period in 2019. With the easing of travel restrictions and China reponing outbound travel for its citizens, Nepali tourism entrepreneurs are pinning high hopes for 2023. NTB on its 24th anniversary announced that it aims to attract at least one million foreign tourists in 2023. In 2022, tourist arrivals reached over 600,000 without any significant contribution from China. Only 9,595 Chinese tourists visited Nepal in 2022. Tour operators say they are receiving increasing fresh inquiries from major source markets including China. While the FITs (free independent travelers) have already started coming to Nepal, group travelers from the northern neighbor arrived in the second week of April, the first group tour from China after the Covid-19 pandemic. The arrival of 180 Chinese trekkers in Nepal on April 13 has rekindled hopes for Nepal's tourism sector. They were the first of four batches of nearly 8,00 Chinese trekkers to visit Nepal to trek on the Poon Hill trail located some 270 kilometers west of Kathmandu. This visit has come after China included Nepal on a second list of 40 destinations for group tours that Chinese nationals could visit starting from March 15. After the northern neighbor allowed its citizens to visit Nepal, NTB and Nepali travel trade entrepreneurs are visiting various Chinese cities to promote Nepal tourism. Travel trade entrepreneurs say that a significant contribution of Chinese tourists would be required if Nepal wants to meet the target of one million visitors in 2023. Tourist Arrivals

Nepal’s exports of palm oil and soybean oil to India could be badly affected after the government hiked the duty on the import of such edible oils in raw forms. Palm and soybean oils are considered among Nepali products with the least value-added, but occupy a chunk of Nepal’s total exports, specifically to India. A decline in the export of edible oils could bring down the country’s overall export to India, with whom Nepal has 65 percent of its international trade. In the Financial Act, 2023 presented to the parliament alongside the federal budget for the fiscal year 2023/24 on May 29, the government hiked duty on the imports of raw soybean and palm oils to 10 percent from one percent currently. Earlier, on 8 Sept 2022, the government reduced the customs duty on the import of edible oils to one percent from 10 percent amending the Financial Act. In a press statement, the Nepal Vegetable Ghee Oil Manufacturers Association said that the government’s decision to hike the duty on the import of raw soybean oil and palm oil will jeopardize the huge investments in the vegetable oil and ghee industry. “If the decision is not corrected, related industries will be shut down affecting the overall economy of the country,” it said. The businesses are subject to income tax of 25 percent including the value-added tax (VAT). According to the association, there are 26 refineries with a fixed and movable capital investment of Rs 100bn. Nepal does not produce raw palm and soybean oils and the oils are imported. Then, they are processed and packaged before selling in the Indian market. The government’s decision to hike the import duty on raw palm and vegetable oils has come at a time exports of their finished items have slumped compared to last fiscal year. Along with the Indian government’s decision to lower duty on the imported raw palm and soybean oils last year, Nepal’s exports of processed vegetable oil faced a setback. According to the Trade and Export Promotion Centre, Nepal’s export of palm oil as of the 10 months of the current fiscal year 2022/23 stood at Rs 18.44bn against Rs 37.94bn during the same period last fiscal year 2021/22. In the last fiscal year, Nepal’s overall export of palm oil was worth Rs 41.06bn. The country exported soybean oil worth Rs 8.46bn in the 10 months of the current fiscal year compared to Rs 45.32bn during the same period last fiscal year, a drop of 81.3 percent. In the last fiscal year, Nepal exported soybean oil worth Rs 48.12bn. Because of the slump in the export of these items, Nepal’s overall export dropped to Rs 130.90bn as of 10 months of this fiscal compared to Rs 173.34bn during the same period of the last fiscal year. The country’s exports of palm and soybean oils suffered ever since India, the main export destination of these two products, lowered tariffs to help tame rising inflation in October 2021. In India, the import duty on crude varieties of palm oil, soybean oil, and sunflower oil is currently zero. However, after taking into account the five percent agri cess and 10 percent social welfare cess, the effective duty on crude varieties of these three edible oils is 5.5 percent. At the start of 2021, effective customs duty on these edible oils was as high as 35.75 percent. Ever since the Indian government removed the import duty on these three types of oil, the tariff advantage Nepali exporters were receiving was gone. In an interview with ApEx in January, Bipin Kabra, owner of Quality Refinery, one of the leading exporters of vegetable and palm oil to India, said Nepal was required to give additional concession to Nepali exporters to outcompete Indian refineries after Nepal lost tariff advantage against India. “In order to restore exports, either India should hike the import duty again or the Nepal government should give us export subsidies,” he had said. India will not be hiking duty on the import of raw soybean and palm oil anytime soon. In late December last year, the Indian government extended the policy of keeping lower tariffs on vegetable oil till March 2024. Government officials and experts say that vegetable oil and palm oil have very low-value additions among Nepali products. But Kabra claimed that there is a value of the addition of as much as 25 percent. “There is a value addition during the refining and packaging process,” he said. “This has helped to grow the packaging industry in Nepal.”

The price of gold has increased by Rs 800 per tola in the domestic market on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 113, 300 per tola today. The gold was traded at Rs 112, 500 per tola on Tuesday. Meanwhile, tejabi gold is being traded at Rs 112, 750 per tola. It was traded at Rs 111, 950 per tola. Similarly, the silver is being traded at Rs 1,435 per tola today.