Ncell-- a multinational telecom firm--became the second largest income tax contributor, paying Rs 4,970 million. The Agricultural Development Bank Ltd ( ADBL) is the largest bank and third largest company, and it paid Rs 1,656.7 million in income tax during the year.
Surya Nepal --an Indo-Nepal-UK joint venture and subsidiary of ITC Ltd--has emerged the fourth largest contribution to income tax, paying Rs 1,654.4 million.
Surya Nepal is involved in manufacturing and marketing cigarettes as well as readymade garments in Nepal, besides exporting the apparel.
At a time when the country is facing a yawning trade deficit and a slowing manufacturing sector, Surya Nepal became the largest manufacturing industry. The fifth to 10th positions have been secured by commercial banks.
Foreign joint ventures Nabil Bank-- the first foreign joint venture bank in the country, Nepal Investment Bank and Himalayan Bank secured fifth, sixth and seventh positions, contributing Rs 1,150 million, Rs 1,050 million and Rs 847.2 million respectively. Two other joint venture commercial banks--Everest Bank and Standard Chartered -- are eighth and ninth ranking contributors, paying income tax of Rs 847 million and Rs 730 million respectively.
State-owned commercial bank Rastriya Banijya Bank stood in 10th position, paying income tax amounting to Rs 620 million.
As per existing law, banks, corporate houses and industrial entities have to pay 30 percent, 25 percent and 20 percent respectively of their profits as income tax. Only Surya Nepal--the sole firm from the manufacturing sector--being included in the top income tax-payer list, highlights the weak contribution of this sector to the national coffers.
Data compiled by the Central Bureau of Statistics (CBS) shows the growth of the manufacturing sector limited to 3 percent in 2010, 4.1 percent in 2011, 3.6 percent in 2012 and a projected at 1.8 percent for 2013.
With the manufacturing sector slowing down consistently, its contribution to Nepal´s gross domestic product (GDP) has been hovering between 6.7 percent and 6.9 percent over the last five years.
However, the service sector´s contribution to GDP stood at 49.5 percent during both fiscal years 2011 and 2012, while 50.6 percent contribution is projected for 2013. “Significant reforms in policies effected in the service sector over two decades are the major factor behind the mammoth growth of this sector and its contribution to national revenue,” Dr Chiranjibi Nepal, Chief Economic Advisor of the Ministry of Finance, told Republica on Tuesday. Contribution of the service sector in the global economy hovers around 70 percent.