THE ISSUE

Starting from the very first day of the current Fiscal Year (2019/20), the Government of Nepal made it mandatory for all salaried employees, public and private sectors. In the following months, there has been a surge in the number of registered taxpayers in Nepal. As per the second Economic Bulletin of the Ministry of Finance, as of September 17 (end of the month of Bhadra in Nepal’s Bikram Sambat calendar), there were a total of 2,762,135 registered permanent account numbers (PAN). Of the total registered PAN; 1,256,099 belong to business PAN (BPAN); 1,504,233 belong to personal PAN (PPAN) and 1,803 belong to withholder PAN (WPAN) category. In addition, there are 232,120 and 88,341 registered value added tax (VAT) and excise accounts.

Between August 18 and September 17, 2019 alone; the Inland Revenue Department (IRD) of the Government of Nepal registered new 42,511; 257,383; and 699 BPAN, PPAN and WPAN respectively. These new registrants account for more than three percent, seventeen percent and thirty-eight percent of total BPAN, PPAN and WPAN registered with the IRD. Similarly, this period saw 7,314 (more than three percent of total VAT accounts) and 5,713 (more than six percent of total excise accounts) new VAT and excise registrants.

WHAT THIS MEANS?

1. Larger public revenue base,
2. Increased size of Nepal’s formal economy, and
3. Helping Government of Nepal and key stakeholders to track country’s major growth sectors and their statues over the period.

This year’s World Economic Forum’s Global Competitiveness Report ranks Nepal in 108^th position (out of 141 ranked world economies). Though improved by one position as compared to the 2018 analysis, Nepal is still the second least competitive economy in South Asia. This year as well, Nepal’s performance across 12 Competitiveness Index Pillars is below average as the economy performed poorly in 7 Pillars and struggled to do better in 1 Pillar. The former Pillars include Institutions, ICT Adoption, Skills, Product Market, Labour Market, Market Size, and Innovation Capability and the latter Pillar include Business Dynamism. This year, for Nepal, country’s performance has improved for only 4 Pillars and they include Infrastructure, Macroeconomic Stability, Health, and Financial System.

Between 2010/11 and 2019, in the race for becoming the most competitive economy in South Asia, Nepal and Pakistan have been the major winners while India and Sri Lanka the biggest losers. Bangladesh has been a minor winner as the country’s competitiveness improved by only 2 positions during this period.

Each year, Dashain witnesses largest internal movement of people in Nepal. Kathmandu Valley accounts for most of this movement. According to the data released by Metropolitan Traffic Office, between Ghatasthapana (DAY 1) and Phulpati (DAY 7) this Dashain, a total of 1,695,360 people left Kathmandu Valley while 488,755 people arrived in the Valley.

Dashain is the longest and the biggest festival in the Bikram Sambat Calendar that symbolizes victory of good over evil. Observed for 15 days, it is an important annual occasion for Nepalis (and Nepali speaking people in other South Asian countries) to reunite with their families, friends and relatives. Of Dashain’s 15 days, 6 days are most important – 1, 7, 8, 9, 10 and 15.

As per the World Bank’s 2018 data, urban population (as percentage of total population) in South Asian economies varies a lot. Among the eight South Asian Association for Regional Cooperation (SAARC) member countries, Bhutan has the highest proportion of population living in urban areas (41%) and Sri Lanka has the lowest (18%). SAARC Region’s proportion of urban population (34%) still lags behind by a large margin as compared to that of the global proportion (55.27%).

As per the first monthly Economic Bulletin of the Ministry of Finance, (Government of Nepal), the country has 171 banks and financial institutions (BFIs). So far, they have opened a total of 27,866,505 bank accounts. To better serve their beneficiaries, the BFIs have issued 6,708,521 and 123,146 debit and credit cards respectively. To further boost people’s access to finance, the existing BFIs have 8,686 branch offices and 3,316 ATM outlets spread across 735 out of country’s 753 local levels.

Nepal had 171 banks and financial institutions (BFIs). As of mid-July 2019, they have opened a total of 27,866,505 bank accounts. To better serve the beneficiaries, the BFIs have issued 6,708,521 and 123,146 debit and credit cards respectively. To further boost people’s access to finance, the existing BFIs have 8,686 branch offices and 3,316 ATM outlets spread across 735 out of country’s 753 local levels.