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The telecom and banking sectors are emerging as the biggest contributors to the national treasury, while the manufacturing sector is slipping on the list of large
taxpayers. This is what the latest Top 10 Taxpayers List 2009/10 illustrates.
The Top 10 Taxpayers 2009/10, prepared by the Ministry of Finance, also shows that Nepal's private sector has maintained its growth path despite the political transition and deteriorating business environment. The fact that seven of the top 10 taxpayers are from the private sector speaks volumes about the contribution of Nepal's corporate sector to the national economy.
The honour of being the No. 1 taxpayer, however, goes to a state-owned enterprise Nepal Telecom (NT). NT has held its position as the largest taxpayer in the country for four straight years, thanks to its massive client base and expansion drive. The state-owned telecom giant paid Rs 9.66 billion in income tax and value added tax (VAT) to the government in 2009/10, an increment of 30.18 percent over the previous year.
Surya Nepal and Gorkha Brewery, the only two companies from the manufacturing sector among the top taxpayers, are ranked second and third in the top 10 list. Surya Nepal, manufacturer of cigarettes and readymade garments, paid Rs 5.93 billion into the government coffers. Gorkha Brewery, a leading manufacturer of beer, chipped in Rs 3.09 billion in 2009/10.
Spice Nepal, the first private sector mobile operator, is in the fourth place with a contribution
of Rs 2.07 billion, up 7.61 percent from what it paid in
the previous year.
Five commercial banks have taken the fifth to the 10th positions, confirming the rapid growth of Nepal's service sector. Nepal Investment Bank Limited (NIBL) climbed two notches to make it to the top five, displacing Nabil Bank. NIBL paid Rs 778 million in 2009/10, securing the distinction of being the highest taxpayer among commercial banks. The bank is also No. 1 among private commercial banks in terms of net profit in 2009/10.
Nabil Bank, the country's first joint-venture bank, has slipped to the sixth place, contributing Rs 747.44 million, followed by Standard Chartered Bank, which paid Rs 655.67 million in the last fiscal year.
State-owned Rastriya Banijya Bank (RBB) has maintained its eighth position in the 2009/10 list. Expansion of branches and introduction of new products and services have helped RBB to contribute Rs 611.95 million.
In the ninth position is a new entrant, Rastriya Beema Sansthan, which contributed Rs 542.33 million to the government last year. Everest Bank paid Rs 535 million to maintain its 10th position in the list.
A close look at top 10 list gives an idea of how the country's economy is currently doing. The dismal growth of the manufacturing sector is reflected by the fact that only two companies in this sector have been able to make it to the top 10. With the industrial sector being badly hit by a series of disturbances-from energy crisis to militant labour-the weak presence of manufacturing companies in the list is not surprising. The fact that Surya Nepal and Gorkha Brewery have managed to stay in the top three positions shows their entrepreneurial capabilities despite going through turbulent waters.
Despite being the largest contributor to the national tax net, the private sector still feels its contribution has been undermined by the government.
In the early 2000s, the government used to honour the biggest taxpayers with the title Commercially Important Person. CIPs used to enjoy special privileges like a separate lounge at Tribhuvan International Airport. However, conferring of the CIP award was discontinued a few years ago.
"The government has failed to honour large taxpayers," said Rajendra Khetan, chairman of the Khetan Group that owns Gorkha Brewery. "Politicians in the government have protected anti-social government administrators who have been exploiting large taxpayers."
2009-10
1. Nepal Telecom Rs 9.66b
2. Surya Nepal Rs 5.93b
3. Gorkha Brewery Rs 3.09b
4. Spice Nepal Rs 2.07b
5. Nepal Investment Bank Rs 778.00m
6. Nabil Bank Rs 747.44m
7. Standard Chartered Rs 655.67m
8. Rastriya Banijya Bank Rs 611.95m
9. Rastriya Beema Sansthan Rs 542.33m
10. Everest Bank Rs 535.00m
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