December 8: There has been a shortage of potatoes and onions in the market due to the imposition of Value Added Tax (VAT) by the government.

The price of these essential food items was already high and the government imposed VAT on top of it.

The businessmen accused the government of imposing the VAT with mala fide intentions and stopped importing potatoes and onions. As a result, the market has been reeling under the shortage of potatoes and onions.

Businessmen, who had partially reduced the supply of potatoes and onions for four days, completely stopped their business since Wednesday saying that they cannot do business due to the 'irrational decision of the government'. As the businessmen halted their business, it has become difficult to find potatoes and onions in the market.

General Secretary of the Potato and Onion Import Export and Wholesalers Association Prakash Gajurel says that the Finance Minister deceived the public by saying that the government decided to impose VAT only on imported potatoes and onions. After the government made a provision to impose VAT on potatoes and onions in current fiscal year, the businessmen met the finance minister and requested him to waive VAT. At that time, the finance minister had assured that VAT would not be levied on potatoes and onions produced in the country.

According to Gajurel, the government has now started imposing VAT even on potatoes and onions produced by the local farmers.

"That's why we reached to the conclusion that potatoes and onions cannot be traded from now on and stopped the business," he told New Business Age.

“We don’t use VAT bill while purchasing potatoes and onions from the local farmers but the government seeks VAT bill from us. When this happens, our income appears higher than the real income and it increases our income tax obligation. Consumers also have to pay higher prices,” he added.

The association has alleged that the government is trying to extort money from traders in the name of VAT.

Meanwhile, the Kalimati Fruits and Vegetables Market Development Committee has removed potatoes and onions from its daily price list. Binay Shrestha, information officer of the committee, informed that due to the problem of VAT, traders have now stopped bringing potatoes and onions to Kalimati. According to him, after the traders did not bring potatoes and onions the committee decided to remove those items from the list.

Due to the traders' strike, potatoes and onions have stopped entering Kalimati and other big vegetable markets since the past few days. According to the data of the committee, 70 to 80 tons of onion and about 150 tons of potatoes used to be imported in Kalimati per day.