Amid all the turbulence going on due to Covid-19 pandemic, the Government of Nepal released its much-awaited Federal Budget for FY 2020/2021 (2077/ 78) on May 28, 2020. There are a lot of provisions to support and promote entrepreneurship and local businesses, however there are definitely rooms for improvements.
Here we present to you a list of some major highlights from the Federal Budget 2020/2021.
- An amount of Rs. 50 Arab allocated for providing credit to Small, Medium and Cottage industries and corona affected the tourism sector at a rate of 5%.
- Provision of Refinancing loan of Rs. 1 Kharab at 5% subsidy rate for Covid affected agriculture, SME and Cottage industries and manufacturing industries has been initiated.
- Establishment of Rs.50 Crore fund to provide seed capital to startups and entrepreneurs with innovative ideas at 2% interest rate from BFIs.
- Migrants interested in self agriculture can now establish business via Land Bank for which Rs. 50 crores has been allocated.
- Farmers can now pay premiums for agricultural crop insurance after the production of crops minimizing the risk involved to some extent and encouraging youths to engage in the agriculture sector.
- Initiation of “One Province One Tourist Spot” to promote the tourism industry that has been hit the hardest by Covid-19 pandemic.
- Company registration and dissolution to be made easier along with establishment of women entrepreneurship
- National Payment gateway to be established which has been a major concern for majority of startups.
- 20% tax exemption on the income of the tourism entrepreneurs involved in businesses related to air services, transportation, hotel, travel and trekking sector.
- 75% exemption to the entrepreneurs doing business up to Rs 2 million, 50% to those doing business from Rs 2 million to Rs 5 million and 25% to those doing business from Rs 5 million to Rs 10 million.
- Income tax exemption period extended by 3 years to 10 years for micro-enterprises run by women entrepreneurs.
These are some of the major highlights noted in the Federal Budget for FY 2020/21 that promotes entrepreneurship and SMEs.
Any additions and feedback on these highlights are highly welcomed.
All these highlights are based on The Federal Budget 2020/ 2021