The Coalition Government has assured businesses and customers that tax rates will not be altered in the near to medium future to increase revenue, according to the 2024-2025 National Budget delivered by Deputy Prime Minister and Finance Minister Prof Biman Prasad. Instead, the government plans to strengthen tax collection efforts.
The Medium Term Fiscal Framework for 2024 to 2027 predicts revenue to rise to around 27% of the Gross Domestic Product, mirroring pre-COVID numbers. Notably, the government is shifting focus to improving tax compliance through education, self-regulation, and counter-strategies against tax evasion and avoidance.
Among the main policy guidelines for the medium term are broadening the tax base by gradually removing exceptions and distortions; improving tax compliance; simplifying tax regime and administration; reviewing the VAT regime and the Export Income Deduction incentive; and reviewing non-tax revenues while ensuring protections for the vulnerable and disadvantaged. These measures also include plans for revenue collection from e-commerce transactions.