PRESIDENT BEING COLLECTIVELY BRIEFED

PARTY AND GOVT. LEADERS COLLECTIVELY BRIEFING PRESIDNT UPDATE

Kathmandu 19 Nov. The ruling coalition government and leaders of two
opposition parties NC and UML are briefing President on Saturday morning’s breakthrough two-point agreement
Maoist Chairman Prachanda, NC President Sushil Koirala, UML
Chairman Jhalanath Khanal and MJFL Chairman Bijaya Kumar
Gachedhar are briefing the ceremonial president collectively on the progress in concluding the peace process and constitution drafting as well..
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ANOTHER BANK REPORTS LOWER PROFIT IN Q1 OF FISCAL YEAR 2011/12

Kathmandu, 19 Nov. Another bank Saturday reported reduced
profit in Q1 of current fiscal year 2011/12 endling 17 October.
Siddhartha Bank reported a net profit of only Rs. 26.241 million to a
Rs. 75.771 million in the same quarter the previous year.
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IRD CONFIRMS ANOTHER 33 FIRMS NVOLVED IN VAT SCAM
Kathmandu, 19 Nov.: The Inland Revenue Department (IRD) has confirmed the involvement of another 33 firms in evading tax and has decided to slap fines of Rs 130 million on them. The IRD has confirmed that a total of 405 firms were involved tax evasion by using fake value added tax (VAT) bills and has imposed penalties totalling Rs 3.58 billion, The Kathmandu
Post reports.
Until October-end, the IRD had completed investigating 365 firms and slapped tax bills of Rs 3.45 billion on them. Nearly three weeks ago, the government had made public the names of 385 firms issuing fake VAT bills, their Permanent Account Numbers (PAN) and the names of companies that used the bills issued by such
firms. The report prepared on March 4 revealed the involvement of some of the country’s
leading business houses and firms under them in the VAT scam.
The IRD had directed the Inland Revenue Offices under it to probe 518 companies suspecting them of conducting illegal transactions. The IRD is now continuing its investigation of the remaining 113 firms, and officials concerned said that it would take at least two months to finish it. “We will complete the smaller cases within the next two weeks,” said Govinda Prasad Subedi, director of the IRD.
With tax evasion becoming a big challenge for the government in collecting adequate revenue for the country’s development activities, it has accorded priority to tax compliance this year instead of expanding the tax net. At present, 19 percent of the total taxes collected by the IRD are generated through tax auditing and investigation measures. The IRD determined taxes worth Rs 8.31 billion by auditing the transactions of 915 income taxpayers and 1,642 VAT payers and investigating 886 taxpayers’ files.
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DRAFT OF PROPERTY TAX BILL READY
Kathmandu, 19 Nov.: A technical committee formed by the Ministry of Finance (MoF) to write a new Property Tax Bill has prepared a draft which includes a provision requiring all Nepalis to declare
their assets, Ashok Thapa writes in The Kathmandu Post..
The government’s move follows demands by the business community which, stung by accusations of endemic tax evasion, has been insisting that property declaration be made mandatory for everybody.
The budget for the current fiscal year has announced introducing a provision of property declaration. It states, “The habit of keeping records of the sources of property and its purpose has not yet developed among the Nepali people. In order to address such problems, the Property Tax Act will allow an individual, family or company to make a voluntary disclosure of all the fixed and movable properties including land, jewellery, cash, bank deposits, lending, share investments and vehicles to the Inland Revenue Office of the Government of Nepal after paying a certain percentage of tax.”
Two months ago, the MoF had formed a taskforce under the coordination of Laxman Aryal, deputy director general of the Inland Revenue Department, charging it to complete the task by mid-November.
“We have completed a draft of the proposed act,” said Aryal. “Once it is finalized after holding discussions with the private sector and other stakeholders, we will submit it to the ministry.”
According to a member of the technical team, the proposed act will label all undisclosed properties as illegal and impose grave punishment to the owners.
As per the draft, the government will introduce a mechanism to trace the records of all forms of property including bank balance, investments in gold, bonds, shares, land and houses and antiques, among others, so that the property cannot be hidden.
Aryal said that the purpose of the new act was to be specific and to introduce a modern system in property taxation. “The aim is also to make the upcoming act compatible with other tax related laws,” he said.
Another IRD official, who wanted to remain anonymous, said that the proposed bill had also made some recommendations on how property should be evaluated and how information about people’s property could be accessed.
Although there is a Property Tax Act, 1990 which was not implemented, a high-level taskforce headed by a former chief commissioner of the Commission for Investigation of Abuse of Authority (CIAA) Surya Nath Upadhyay had recommended earlier that the existing act was outdated and that a new one should be drafted.
Upadhyay’s team had also prepared a draft of the proposed act, and the present technical team had been told to refer to it, according to Shanta Raj Subedi, joint secretary of the MoF.
An MoF official said that the current act remained unimplemented due to lack of a proper database to examine an individual’s property and a mechanism to enforce it.
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DETAILS OF EN MASSE TRANSFER OF 450 NEPAL POLICE INSPECTORS
Kathmandu, Nov 18, Nearly after a two years’ gap, the Nepal Police Friday transferred 450 police inspectors, The Rising Nepal reports.
This time, most of the valley-based police inspectors were transferred to remote areas and those serving in the remote parts were brought to the capital city.
Of the major transfer in the valley, Tapan Kumar Dahal was brought to Durbar Marga-based Metropolitan Police Sector, Tilak Bharati was given the charge of Sorahakhutte Metropolitan Police Sector, and Hem Kumar Thapa at Jana Sewa Police Office, New Road.
Similarly, Apilraj Bohara, Sudhiraj Shah, Kiran Jung Kunwar, and Shyam Kumar Mahato were transferred to Gausala, Thankot, Kamalpokhari, and Singha Durbar respectively.
Likewise, Sanjay Rijal, Surya Prakash Subedi, Jitendra Bhattarai, Shyambabu Oliya and Yadav Thapa, Anoj Junga Rayamajhi and Hobindra Bogati were respectively transferred to Swoyambhu, New Baneswhore, Balaju and Maharajgunj.
Similarly, Padamraj Joshi at Lalitpur Police Range, Krishna Prasad Koirala of Durbarmarga were transferred at the Central Investigation Bureau (CIB), Shiva Bahadur Singh of Sorakhuttee was transferred to Banke, Kabit Katwal and Rugam Kunwar were shifted to UN office based at Nepal Police Headquarters.
(NOTE: UML Home Minister transferred 400 officers en masse as well. Friday’s mass transfer has also been called the biggest in recent times.)
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INTERVIEW IN THE RISING NEPAL

NEPALI COFFEE ORGANIC BY DEFAULT: DHRUBA RAJ BK

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Dhurba Raj B.K. is the managing director of Buddha Organic Coffee Industry, one of the leading coffee trading houses in Nepal. He has been in the coffee sector just for about a decade, but the success he has achieved during this short time is tremendous. Dhurba has quite interesting and memorable story to share. He began his coffee career planting coffee saplings in around 50 ropanis of his land including, paddy field. When he opted to cultivate coffee in his land, people around him, including his family members, opposed and made him a subject of laughter as coffee was a new crop and people had little idea. They believed that I had gone mad planting coffee in the paddy field, he says. That troubled him quite a lot. I also became confused thinking whether I was wrong to cultivate coffee in the paddy field, he adds. But within a couple of years later, when the coffee trees started to yield him, he got its answer. I was right then, he claims.
Coffee is one of the most valuable cash crops in the world’s trade. For many years, coffee occupied the second position in terms of its value after oil as a source of foreign exchange in the developing countries. Exports of coffee account for a substantial part of their foreign exchange earnings. Yogesh Pokharel of The Rising Nepal talked to Dhurba on various issues related to coffee production, prospects and challenges. Excerpts:
Nepalese coffee sector has emerged as one of the most potential sectors of our export trade. The government has also accorded high priority to production and export of coffee. How is the present situation of coffee in Nepal?Coffee has become one of the most potential sectors of Nepalese export trade within a very short span of time. Though there is the history of hundreds of years of coffee in the world, our coffee business is at an infant stage. It has been just around 20 years that we jumped into this sector and started commercial production, processing and marketing. Nonetheless, it has developed rapidly. Now, the annual production of red cherry coffee has crossed 2000 metric tonnes. Most of the hilly regions of the country have suitable climate for coffee cultivation and it has spread in more than 40 districts of Nepal. According to most recent figures available, coffee is cultivated in around 1750 hectares in the country.
Which parts of the country have most suitable climate and other requirements for coffee farming?
As Nepal is a mountainous country, the best crop, I think, is coffee. It can be grown in the steep hills without much care and has high premium price niche market. Climate, soil, topography, relative humidity, temperature and rainfall all available in our country are suitable for coffee cultivation. We do not need entirely irrigated land for this. So, the entire hilly region, from Ilam to Dadeldhura, between the altitude 800 metres above the sea level to 1700 metres above the sea level is supposed best for coffee. It means we have plenty of such land across the country just lying barren.
The ecological settings in the Himalayan hills provide Nepalese coffee a unique opportunity to enter international specialty markets. It is grown in small family farms under shade in the northern hills. Little or no external input is used.
Though small in amount, coffee could be an important occupation in the rural economics of Nepal with massive participation of marginalized, poor and down-trodden class of the rural communities in its farming. Additionally, it could be an important means for earning foreign currency and in maintaining a balance in the eco-system. Similarly, coffee is also a promising crop for Nepal due to the availability of soil with fragile nature and appropriate climatic conditions in the mid-hills.
Which parts of the country or districts have highest concentration of coffee production, at present?
Normally, coffee farming has spread across the hilly parts of the country from the east to the west. However, districts such as Gulmi, Lalitpur, Syangja, Palpa, Arghakhanchi, Kavre and Nuwakot are the major coffee producers. Now, some other districts such as Kaski, Gorkha, Tanahun, Lamjung, Parbat, Baglung, Dhading, and Sindhupalchowk are also emerging as commercial coffee producing areas.
How Nepali coffee is different from others?
As I mentioned earlier, the geographical and ecological setting of the country have provided us with unique opportunity to grow special coffee (specialty coffee). Let me clarify first what is specialty coffee. There are few qualities that make the coffee a specialty one, which has high premium price market. Most of the Nepali coffee is sold in such specialty markets. First, here in Nepal, majority of coffee growers are small, poor farmers and usually use no pesticides, insecticides and other chemical fertilizers. They even do not weed and manure coffee plants grown in the steep and the unoccupied area of the hills facing chilly mountains. That makes Nepali coffee quite natural and organic. This is one of the features that our coffee is by default organic product. Besides, we grow coffee under the shade. Similarly, most of the coffee is grown in the hilly areas with more than 800 metres altitude. That makes it different from others and our coffee tastes better.
What are the challenges of coffee farming in Nepal?
Even if the coffee industry has been growing more rapidly, there are several bottlenecks. The government has no specific plans to promote Nepali coffee. If there are any, they are only limited to paper and rhetoric, not in action. Though we come across that the government has accorded high priority to the coffee sector and identified it as one of the most potential exportable items, the government’s plans and programmes have never implemented in this sector. Whatever success is there, it is all due to hard labour of the private sector.
Similarly, another main problem is the market. We do not have any sustainable market. The price of coffee remains fluctuated all the times in the international markets. The small farmers growing coffee here in Nepal cannot compete in such markets. Another major problem is that coffee is a relatively new crop for Nepal and therefore, there has not been so much research or study on this crop.
If there are problems with the international market, why does not the private sector look for the domestic market?
The domestic market is also growing gradually and consumption in the domestic market has reached almost 30 per cent of the total production. Nescafe is the major competitor here. As it is an instant coffee, it is soluble and people are used to it. Indeed, coffee in itself is insoluble. It is made soluble by mixing different chemicals which are injurious to health. We produce organic coffee, which is also called filter coffee. Currently, there are two types of coffee available in the world market: one filter and another instant. Nepal’s coffee is filter. But it is sad that instant has hegemony in our domestic market.
The government of Nepal has also given high priority to this sector and allocated a huge amount for the promotion of coffee. How productive have been the government’s programmes?
Though the government has hyped the issue a lot, it has no any concrete programme to promote this sector. I mean the government should facilitate this business with proper policies, regulations and guidelines. The government has prepared a three-year strategic plan to boost both production and export of Nepali coffee, but it remained only in the papers. The strategic plan aims at increasing production, enhancing and assuring quality and developing markets for Nepali coffee through strong and coordinated action by the agencies concerned. Similarly, the government should envisage such plans to tap the growing demand of Nepali coffee in the international markets.
Do you tell us about your company?
Though quite a new one, our company has succeeded in achieving great success within a few years of its establishment. Now, we are the number one exporter of coffee in Nepal. Last year, we were rewarded by the government for our success. Similarly, we are the number one company within the domestic market, too.
Do you want to say anything more about this sector?
Coffee can be a crucial means to balance our trade deficit and earn foreign currency generating a large number of jobs within the country if the government comes up with integrated programmes to facilitate farmers and traders in production, processing and marketing of coffee. It has a very good scope.
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