Kathmandu – The Federation of Handicraft Associations of Nepal (FHAN) has welcomed the budget announcement for the Fiscal Year 2018/19 by Finance Minister Yuba Raj Khatiwada, stating it to be positive toward developing and promoting the handicraft sector.
But the association is also concerned with the government’s failure to address some of the issues the association has been raising for the promotion of the handicraft sector.
Issuing a statement on Friday, the FHAN said the budget allocation for the study to establish one industrial zone, one economic zone, and one special economic zone in each province is positive. The government announcement to open an industrial village in collaboration with the private sector in each local unit is commendable, according to the FHAN’s statement.
In the budget speech, Minister Khatiwada had said that funds will be allocated to set up a permanent exhibition hall in all diplomatic missions abroad to showcase Nepal’s handicraft and other products as part of the government’s efforts to promote export. The federation appreciated this decision.
However, the federation has expressed concerns about the budget’s failure to address its one key demand to amend a provision in the Public Procurement Act that requires government agencies to purchase goods worth above Rs 5,000 from only those firms which are registered for value added tax (VAT).
“Industries and firms producing handicrafts are not required to register for VAT. However, the provision to buy goods above Rs 5,000 through VAT-registered firms makes it difficult for the government to buy from handicraft firms,” read the statement. “Handicraft industries were raising the issue to make amendment to this provision. However, the budget did not address the issue,” the statement added.