Country:

Nepal

Date:

2020 - 2021

Implementor:

FECOFUN The Federation of Community Forestry Users Nepal

Funding Amount:

49,010

Details:

FECOFUN, which represents more than 22,000 Community Forestry User Groups (CFUGs) has challenged the impact of taxation on CFUG funds, which would otherwise be supporting forest conservation, education, livelihoods, microloans, and other activities, as per Nepal’s Community Forestry Guidelines (2014). To influence different government units and participate in the broader policy-making process, FECOFUN has worked with government stakeholders at various levels to harmonize the taxation structure into a single, unified tax policy.

As a result of FECOFUN’s efforts:

  1. Nationally, removal of 15% tax on Sal and Khayar species;
  2. In Provice 1, removal of additional 15% taxes imposed on other species;
  3. In Bagmati Province, the provincial government is in continuous discussions with the Federal government, and have formed a committee;
  4. The Ministry of Federal Affairs is engaged to remove the 10% tax required by the Local Government Operation Act;
  5. Nepal’s Finance Minister has committed to drop the 25% income tax in the upcoming Finance Act; and
  6. FECOFUN is in discussions with the policy-makers and stakeholders of Province 2, Gandaki Province, Lumbini Province, Karnali Province and Sudurpaschim Province.

These provinces are in the process of drafting their Provincial Forest Act, and FECOFUN is campaigning to remove tax provision in those policies.