HAN has suggested to provide 50 percent exemption in tax on hotels in the upcoming budget


3rd May, 2021 | Tourism Mail Crew


KATHMANDU, May 03: The Hotel Association of Nepal (HAN) has suggested to provide 50 percent exemption in value added tax and income tax on hotels in the upcoming budget 2078/79.

It is suggested that the hotel sector, which has been severely affected by the Corona virus epidemic, be given a 50 per cent rebate on value added tax and a 20 per cent rebate on income tax for the next two years.

Similarly, the federal or local government and the metropolis or municipality or village municipality have demanded that the direct taxes of various titles be waived for the next three years.

It has been mentioned that the property tax levied on hotels by the corporation will be given 75 percent for 2077/078 and another 10 percent and 85 percent discount will be given in the coming years.

It has demanded that the provision of value added tax claim for gas and diesel, which was removed from the last fiscal year, should be re-implemented for the hotel sector.

At the same time, special refinancing should be made more effective and continued for the next two years and the limit of special refinancing should be increased from 50 million to 100 million.

 In addition, the interest on loans taken under various headings should be deducted from the fines and penalties. Han suggested that the refinancing limit should be increased from Rs 200 million depending on the size of investment in hotels and a separate employment protection fund and tourism development (hotel) fund should be set up for the most affected hotel industry.

HAN proposed that the demand charge waiver provided to the hotel industry should be implemented immediately as well as 50 percent discount on electricity tariff for the hotel sector for the next two years and 100 percent discount on demand fee for at least two years until the situation improves.

The government should contribute 31 percent (20 percent of the company and 11 percent of the employees) of their basic remuneration to the social security fund for one year and the practice should be done as per the lockdown and up to 50 percent of the deposit so far without any interest. Arrangements should be made to use the fee.

Hotels / resorts operating by renting government structures have been told that the rent should be completely deducted in case the structure is closed. He also said that the rent should be maintained at a concessional rate after coming into operation and since small and medium hotels are mostly rented, there is a lack of collateral.

At the same time, as the environmental study to be done by the hotels could not be done on time due to lack of funds, it has been proposed to waive the penalty for extending the time period by two years.