Kathmandu, June 2

The price of precious metals dipped slightly in the trading week between May 27 and June 1, with prices stuck in tight range in most Asian centres due to sluggish demand.

“Numerous factors, including certainty of talks between the United States and North Korea, rise in employment and drop in price of crude oil, contributed to the decline in bullion price,” said Dharma Sundar Bajracharya, general secretary at Federation of Nepal Gold and Silver Dealers’ Association (FeNeGoSiDA), in a statement.

FeNeGoSiDA had set gold price at Rs 58,900 per tola on Sunday and its price fell by Rs 200 a tola to Rs 58,700 per tola on Monday. Bullion price was unchanged the next day before rising by Rs 100 a tola to Rs 58,800 per tola on Wednesday. Price of gold fell by Rs 200 a tola each day for next two days — to be priced at Rs 58,600 per tola on Thursday and Rs 58,400 a tola on Friday.

FeNeGoSiDA set trading rate of silver at Rs 770 per tola on Sunday and its price was stable for the next two days. On Wednesday, the price of the grey metal dipped by five rupees a tola to Rs 765 per tola and remained constant for the rest of the week.

Reuters reported that an inauspicious period for buying the yellow metal dampened demand in southern neighbour India, which is the second biggest consumer of the metal.

“Retail buyers are not making purchases due to Adhik Maas. For the next two weeks demand will remain weak,” Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata, told Reuters.

Adhik Maas is an extra month in the Hindu calendar that ends on June 13. It is considered inauspicious and people avoid weddings, buying gold or property during the period.

Demand was lacklustre in other Asian centres as well, with premiums in China, the world’s top gold consumer, easing for the second straight week to $4 to $5 an ounce over the global benchmark. This compares with $6 to $7 an ounce quoted last week.

Analysts are closely watching the geopolitical issues that have been supportive of gold prices such as the current trade dispute between the United States and China, the on and off again summit between the US and North Korea, and the newest wildcard placing the eurozone in financial jeopardy with Italy’s political upheaval and massive 2.3-trillion-euro debt.

While these factors and events will undoubtedly play a key and critical role in helping shape gold pricing in June, it will be dollar strength or weakness that will most likely have the most significant impact as to the direction of the precious metals complex, as per analysts.

Kathmandu, June 2

The private sector of the country has criticised the federal budget 2018-19 and termed it a ‘bureaucratic budget’ as it will not be able to address the key constraints of the economy.

Federation of Nepalese Chambers of Commerce and Industry (FNCCI) — the largest private sector umbrella body — has said that the budget has only partially addressed the problems of the agriculture and tourism sectors and largely ignored the industrial and manufacturing sectors.

“Though the budget is supposed to be a political document, we found the federal budget ‘bureaucratic’,” said Umesh Lal Shrestha, vice-president of FNCCI.

“The country needs to attract investment in every sector, as growth in all the sectors is static due to lack of fresh investment, but the federal budget has imposed additional taxes even on those sectors that had started performing relatively well in the recent years.”

Citing that the cost of production is already high in the country, Shrestha said that the rise in tax rate will also discourage investment in the economy.

The Confederation of Nepalese Industries (CNI) has said that the budget has favoured the cooperatives sector and adopted a policy to collect more taxes from the industrial and commercial sectors.

“Industries struggling to survive will be hit hard as the tax rate is high,” as per industrialists. Ultimately, industries will pass on the increased cost of production to the consumers, except in those sectors like hydropower that cannot top off the cost to consumers.

Shailendra Guragain, president of Independent Power Producers’ Association – Nepal (IPPAN), said that the budget has not addressed the challenges faced by the domestic power producers. “Most importantly, the government has deviated from the earlier policy of extending value added tax (VAT) rebate to developers for Rs five million per megawatt for generation projects.

As per Guragain, no substantial facility has been offered to domestic hydropower developers, while foreign investors have been provided a raft of facilities.

“The federal budget has raised the tax on telecommunication service providers and internet service providers in contradiction to the government’s policy of increasing access of internet to all,” one internet service provider (ISP) told The Himalayan Times on condition of anonymity.

Likewise, the capital gains tax (CGT) threshold, which was Rs five million some two decades back, has been brought down to Rs one million on real estate trading, which is not pragmatic as the value of real estate has increased by multiple times over this period of time, as per realty traders.

The private sector umbrella bodies are preparing to bring out a common view on the federal budget after a few days.

Kathmandu, June 2

The Employment Permit System (EPS) Korea Section under the Department of Foreign Employment (DoFE) has published a notice providing information regarding the examination centres for the ninth Test of Proficiency in Korean (TOPIK) language today.

Aspiring candidates can sit for their Korean language proficiency examination from a total of 28 test centres. As per EPS Korea Section, 24 test centres are located in Kathmandu Valley and four are in Pokhara. The Korean government is holding the exams on June 9 and 10.

A total of 82,264 candidates seeking jobs in South Korea have submitted online application forms for the Korean language test this year.

Earlier, the Korean government had said that it would employ 7,100 Nepali workers in Korea in 2019, of which 4,800 would get jobs in the production sector alone. The labour demand from South Korea stood at 10,200 in 2018 and 3,100 in 2017.

Of the total applicants, 12,000 will have to sit for the exam in Pokhara, while the remaining applicants will have to appear for the test in Kathmandu.

Of the total applicants for this year, EPS Korea Section has said that 39,640 (30,179 males and 9,461 females) have applied for jobs in the agriculture sector and 42,624 (39,208 males and 3,416 females) have applied for jobs in production sector.

Kathmandu, June 2

The market price of daily consumable items will most likely rise soon as the federal budget has scrapped value added tax (VAT) rebate facility for traders of oil, pulses and flour, among others, and also removed the provision of tariff exemption.

Immediately after the government unveiled the budget for fiscal year 2018-19, the Association of Nepalese Rice, Oil and Pulses Industry signalled the hike in price of daily consumable items citing the government had deviated from the earlier policy of protecting domestic industries through VAT rebate for agro processing industries. The agro-based industries will be hit hard by the government’s new tax policy announced through the federal budget, as per the association.

“Earlier, the government had extended up to 40 per cent VAT rebate facility to agro-processing industries to safeguard domestic industries.”

The facility was extended to importers of oil seeds who produce edible oil within the country. The federal budget has scrapped this provision, along with exemption of customs duty. Traders will now have to pay five per cent customs tariff on oil seeds compared to one per cent earlier. Consequently, the price of one litre of edible oil could rise by up to Rs 15, as per domestic industries.

“With just five per cent goods and service tax (GST) levied on edible oil in India, it will be cheaper in India and people could simply resort to bringing in the commodity from the southern neighbour,” according to the association.

Earlier, Finance Minister Yubaraj Khatiwada had hinted that tariff on finished products may  be raised and that on primary agro products could be brought down for maximum value addition in the economy. This was expected to attract investment in agro processing industries and also create job opportunities.

However, the budget has raised customs tariff of unprocessed lentils to 10 per cent, which is equivalent to tariff for pulses (as finished goods). The equal tariff policy will adversely affect employment in the pulses industries, according to Subodh Kumar Gupta, general secretary of the Association of Nepalese Rice, Oil and Pulses Industry.

The owners of agro-based industries have said that the government has not taken any initiative to curb the import of rice despite its import value standing at around Rs 2.5 billion per month and domination of Indian brands in the local market.

“To protect the rice mills and promote Nepali brands, the government should have hiked the tariff rate on rice. By not taking any initiative to curb rice import, agro production base in the economy will be negatively impacted,” said Gupta.

However, Shishir Kumar Dhungana, revenue secretary at the Ministry of Finance, said that the price of daily consumables will not rise as claimed by the association as they have been asked to import raw materials in bulk and take benefit of the economies of scale in processing and production.

Meanwhile, the government will intensify market monitoring based on the stocks disclosed by the wholesale traders to the tax administration just before the budget to prevent consumers from paying higher prices for food items.