Separate Intellectual Property body: A separate wing to address the issues related to intellectual property rights is to be set up by the Ministry of Industry (MoI). Currently, it is being taken care of by the Industrial Property Division (IPD) under the Department of Industry (DoI). The new body will have a wider scope to exercise its authority by having claims registered from other fields including academics and arts, while at the same time helping Nepal execute its commitment to the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO).
identity card system. The mandatory provision of filling customs declaration forms while importing goods worth more than NPR 100 through land and NPR 5000 through air has had a positive impact. In the first 29 days of the current fiscal year, the DoC collected customs revenue summing up to NPR 6.53 million (USD 91,087) and has a target of NPR 100 billion (USD 1.4 billion) for the current year 2011/12.61
Export Incentives: Exporters have not received the benefits of cash incentives on exports. NPR 600 million (USD 8.37 million) has been set aside for cash incentives but due to the delay of the Department of Industry (DoI) in following the standard for incentive distribution, this is yet to materialize. The scheme promises incentives of 2%, 3%, and 4% on export of goods generating 30-50%, 5080%, and more than 80% in value addition. The current budget has increased the allocation towards incentives by NPR 60 million (USD 836,937), but failed to elate exporters earning in Indian Currency. The Ministry of Finance overlooked the proposal of the MoCS that exporters earning in India should receive incentives as well.60
The housing market is an indication of the state of the economy as a whole. People buy new homes only when they are confident that they’ll have enough income to pay for it, so economic downturns can depress the housing market considerably.
Customs Review and Evaluation: The Department of Customs (DoC) conducted its periodical review on the reference prices of 305 imports. This was conducted on the basis of rules for custom valuation set by the World Trade Organization (WTO). The review revealed that out of 305 imports, 181 items were third-country imports while the rest come from India. The review was also conducted to discourage undervaluation and the smuggling of goods to Nepal. In order to systematize the whole import process and collect higher volume of import customs revenue, the Finance Ministry is preparing to introduce an importer
Real Estate
Real estate market still shaky: The realty and housing sector of Nepal during the last one and a half year has gone into near recession after the central bank, fearing the creation of realty bubble, capped the credit floated to the sector in 2009. During the same period a directive issued by the Nepal Rastra Bank (NRB) required individuals to disclose income sources while purchasing land worth more than NPR 3 million (USD 41,846) and houses worth more than NPR 5 million (USD 69,744). The imposition of a capital gain tax further impacted the realty market. Adding to the woes of the realty sector, the liquidity crunch tightened the credit flow to the housing and real estate sector. As a result, the government was able to collect NPR 3.2 billion (USD 44.6 million) for the fiscal year 2010/2011 as against the target of NPR 6.3 billion (USD 87.88 million) from the realty sector. Revenue from land transaction, alone decreased by 46.5% against the NPR 6 billion (USD 83.69 million) collected in the fiscal year 2009/2010.62
Docking Nepal’s Economic Analysis
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