Leading garment exporters in Nepal are lobbying for the introduction of cash incentive scheme for the benefit for export community. Making amendment to the cash incentive guidelines last year, the government had removed the incentive scheme based on value addition. It had made all exports with value addition of a minimum of 30 per cent eligible for cash incentives as demanded by the private sector. It had also introduced incentive of one per cent for the listed 22 products and two per cent for 10 other products.
Now exporters are putting pressure on the government to re-introduce the incentive scheme based on value addition. Under the cash incentive scheme based on value addition, exporters could get two per cent incentive for exports with 30 to 50 per cent value addition and three per cent cash incentive for products having value addition in range of 50 to 80 per cent. Exports having value addition of more than 80 per cent were eligible for four per cent cash incentive.
The ministry of Commerce and Supplies has now formed a six-member study panel led by Director General of Department of Industry Dhruba Lal Rajbanshi to recommend second amendment to the cash incentives guidelines. After the first amendment to the regulation, the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chamber of Commerce (NCC) started issuing Certificate of Origin stating that exports have 30 per cent value addition. They used to study the certificates without evaluating value addition of exports.
While exporters have denied accepting cash incentives this year, in a bid to pile pressure on the government to amend the guidelines. The government has allocated Rs 300 million for distribution of cash incentives in the current fiscal year.
