On 14th November 2019, Bikalpa-an Alternative organized a program titled “Doing Business Challenges in Biratnagar-The Way Forward”. The program was held at Hotel Namaskar and consisted of local businessmen from diverse business background. The program was designed to figure out the hurdles and challenges faced while doing business including the registration process and tax payment in Biratnagar as part of the research. In total, 16 attendees were present at the event.
The opening session of the program was moderated by Basanta Adhikari and Sarwagya Raj Pandey led the discussion. The centre of activity included discusing the risks, hurdles, hassles and challenges in Ease of doing business environment in Biratnagar and about the policies that require attention.
Following the discussion, the floor was opened for recommendation and the participants provided their grievance and recommendation. Following are the excerpts from the raised questions.
- Registration process is still riddled with policy loopholes and the officials can still stall the process using those loopholes.
- There is still lack of proper co-ordination between the federal and local registration authorities. Some of the businesses need to be registered through Office of Cottage and small Industries while others can be registered at the ward office.
- Getting construction permit and dispute settlement is not possible without bribing.
- Tax compliance is very low and many land owners don’t pay their tax on time due to which new business owners find it hard to register due to lack of tax-clearance. There is no proper mechanism from the government to collect tax on time.
- Despite federalism, even simple tasks like registering a trademark takes over 6 months, and can only be done through central office in Kathmandu.
- There is no coherence between the ward officials responsible for the registration and Nepal Electricity Authority, which takes very long time to provide new connection.
- During registration, the authorities are very unwelcoming to new ideas and discourage the applicant, and also interfere with their business model.
- Officials are not up-to-date on the changing business scenario and don’t treat many tax payers properly due to which the businessmen and officials don’t view each other well.
- The local government’s policies are discriminatory to certain business like liquor, for which the government has created an entry barrier for small business and given ample opportunities for the officials to demand for bribes.
- Since the taxes are not properly categorized, the recent tax hike has been very steep and made it unsustainable for the business houses to function.
- There are many policy loopholes exploited by the officials, through which they can terrorize the tax payers and coerce bribe from them. The officials are capable of lowering the total payable tax if the person is able to pay a certain amount as commission.
- The government strictly monitors financial transactions and demands various documents from banks as a result of which the businessmen can’t get their payment on time.
Following are the snippets of recommendations from the discussion:
- Introduce a flat tax system.
- Educating the public and ensuring that the public officials are updated academically and technically about the business policies.
- Experts in respective fields should be designated/hired in order to minimize loop holes.
- Train the officials on the new technologies used.
- None of above
- Need to change mindset of government officials towards businessmen.
- One point stop (one window policy) strategy for seamless registration of the government which will provide convenience and efficiency.
- Policies should resonate the problems faced by the market.
- Need to provide performance based incentives which may discourage bribery.
- Make paying taxes easier by simplifying the process related to payments.
- Proper categorization of taxes should be done at local level so as to decrease tax burden on small business.
- To ease the financing system which is slow and also to open channels for foreign payments.
- If the government keeps arbitrarily fixing taxes on the business, they will have to allow the businessmen to fix their own prices.
