The government has come to the conclusion that the import ban will not be extended after the revenue shortfall.

18 November, Kathmandu. The government will not extend the import ban on four luxury items after eight and a half months. Sources in the Prime Minister’s Office and the Council of Ministers said the government has come to the conclusion that the import ban on high-end vehicles, mobile phones, liquor and motorcycles will not continue beyond the end of November.

A senior official said that after discussions with Nepal Rastra Bank, Ministry of Finance and Ministry of Commerce, the government has reached the stage of lifting the ban and now only the legal process is left to lift the ban.
After analyzing the situation in the outer sector of the economy pushed towards the problem and revenue collection affected, the ban is going to open soon. International donor agencies are also suggesting the use of monetary instruments with interest rates instead of sanctions.

“Now the ban on mobile phones above $300, cars above $50,000, foreign liquor and motorcycles will be lifted,” the source said.

The government claims that the post-discovery situation has improved in savings, improved foreign exchange reserves and increased remittance inflows as compared to the situation after the ban began, hence the import ban has been lifted.

Depleting foreign exchange reserves due to increase in imports, the government adopted a policy of complete ban on import of 10 types of luxury goods by the end of the financial year.

Approved ban on liquor, tobacco, diesel and petrol vehicles, motorcycles above 250 cc, food including crisps and lage, diamonds, mobile sets above $600, toys of all kinds, TVs, color TVs larger than 32 inches Went. 14 August The ban on cars, mobiles, liquor and motorcycles remained in place till the end of 29 December.

On the other hand, the Ministry of Industry, Commerce and Supply is also studying the situation of lifting the ban. Ministry’s Commerce and Supplies Secretary Toyam Raya said they are studying it.

“Our conclusion is that the import ban cannot be kept forever, but we are studying the ban till the end of November,” said Secretary Raya.

There is a legal provision that after the Ministry has decided on the ban and sent the file to the Council of Ministers, the decision must be made and a notice published in the Gazette.

‘Maintain cash margin and open imports’
Nepal Rastra Bank had suggested to the government to remove the import ban and retain the cash margin facility. Government officials claim that there is no significant effect of opening import restrictions, so they have suggested removal of cash margin as well.

A ministry official said the National Bank has suggested that monetary conditions have improved compared to the situation when restrictive tools were used and see what the consequences would be from opening up imports.

National Bank spokesperson Dr. Gunakaran Bhatt says that the external sector of the economy is improving. Claiming that there is no formal suggestion or dialogue with the government regarding the import ban, Bhatt said that the result of strictness on imports has been seen positively in the economy.

According to the bank’s first quarter report, foreign exchange reserves have also improved after research on savings.

In the financial year 2077/078, the balance sheet was in a surplus of 1 trillion 2 billion and by the end of the financial year 2078/79, it was in a deficit of 2 trillion 55 billion 26 billion. But in the third month of the current year, there is a surplus of 12 billion 43 crores after 14 months.

Similarly, the total foreign exchange reserves which stood at 13 trillion 99 billion 30 million at the end of June 2078 fell to 12 trillion 15 billion 80 million at the end of June 2079. Meanwhile, in October this year, the foreign exchange reserves reached 12.46 billion 22 billion compared to June due to the increase in the value of the dollar. The Central Bank has estimated that this foreign exchange reserves can cover 8.3 months of imports of goods and services.

Loss of Revenue, Increase in Smuggling : Meaning
The finance ministry has analyzed that though the import ban has helped in improving the monetary situation, customs revenue has taken a severe hit.

Sources in the ministry said that imports have been opened after a reduction in customs revenue due to completely restricted items. An official said the ban has been a double whammy for the government as there has been a large scale smuggling of goods other than vehicles and motorcycles.

“The National Bank and the Finance Ministry are of the same view that the import ban should not be extended,” the official said. We suggest that it should be opened gradually.

According to the ministry, till November 17 of the current financial year, the government has earned Rs 2 trillion 94 billion from revenue. While last year, revenue of Rs 3.72 trillion was collected during the period under review.

Source: OnlineKhabar

Himal Sanchar