Finance Minister Wagle highlights budget’s focus on youth employment and tax reforms

Finance Minister Dr. Swarnim Wagle claims that the upcoming fiscal year’s budget will lay the groundwork for policy reforms in the country’s economy and inspire hope among the younger generation.

Speaking at a ‘post-budget’ discussion organized by the Nepal Economic Journalists Association (NAFIZ) on Monday, Dr. Wagle made these assertions.

Dr. Wagle stated that the budget is focused on creating an environment where young people who have recently completed their studies can earn up to one lakh rupees per month with dignity within the country. Describing the tax exemption on income up to 10 lakh rupees as a ‘revolutionary’ step, he expressed confidence that this would increase money circulation in the market and invigorate the economy.

He also clarified that the policy aims to convert savings into investments by reducing the 39 percent tax on high-income groups by 10 percentage points. Highlighting that tens of thousands of Nepali entrepreneurs are burdened with old tax arrears, Dr. Wagle informed that the budget allows for a fresh start (rejuvenation) by paying a 1 percent administrative fee.

The budget includes plans to offer some shares of Nepal Telecom to the general public, strengthen the Rastriya Banijya Bank, and completely restructure Nepal Airlines Corporation (NAC) and Nepal Electricity Authority (NEA). He committed to completing these tasks within this year. Instead of relying solely on traditional loan sources, he mentioned that resources for large infrastructure projects will be mobilized through the ‘Alternative Development Finance Bill’. Offshore bonds, diaspora bonds, and thematic bonds will be issued for this purpose. He also outlined plans for strategic investments using a sovereign wealth fund model to mitigate foreign exchange risks through a ‘hedging’ policy.

Dr. Wagle clarified that the government will not retract the decision to impose VAT on electricity but will seek alternatives to prevent the burden from falling on consumers. From Shrawan 1, adjustments will be made through the Electricity Regulatory Commission, or relief will be provided to consumers by increasing the limit of free units for the underprivileged, according to his argument.