Tax Dodgers in Nepal to face stern action

KATHMANDU, JAN 11 -

 

After failing to attract expected number of tax payers under a special scheme that offers a certain tax exemption, the government on Friday said it will take stern action against tax evaders.

 

The Financial Ordinance 2013 has offered different levels of tax exemptions to different types of tax payers, provided they pay outstanding tax es within mid-January 2014. The targeted tax payers are private institutions, small traders, cooperatives, professionals and other individuals. The scheme has been designed for both income tax payers and VAT payers.

 

Under the scheme, tax payers who have registered with tax office for years have been allowed to register by paying the tax for the last two years only. Although the private sector has been demanding an extension to the deadline, the government on Friday made it clear the deadline will not be extended, warning of a sterner action after the deadline ends.

 

Speaking at an interaction with the regulators such as Insurance Board and Securities Board of Nepal, Finance Minister Shankar Prasad Koirala told those not responding to the government’s scheme not to expect a deadline extension. “After the current deadline ends, the revenue authority will reach to your doorstep to take a legal action,” he said.

 

According to the Inland Revenue Department (IRD), around 4,400 small traders having annual transaction of less than Rs 2 million, who were facing problem of mismatch in tax records, were supposed to avail facility. “But only 1,000 such traders have come forth,” said IRD General Director Tanka Mani Sharma.

 

Under programme, traders have been asked to pay income tax for fiscal year 2010-11 and 2011-12 

within mid-January 2014 to get exemptions in tax , fees and interest. The facility was announced after traders’ complaints about record mismatch.

 

According to the IRD, only around 600 professionals took the benefit of the scheme, IRD officials termed disappointing. The Financial Ordinance has told the professionals—who are liable to pay tax es but have not acquired Personal Account Number (PAN) and have failed to pay income tax until fiscal year 2011-12—to pay the tax es for fiscal year 2010-11 and fiscal year 2011-12 within mid-January 2014. If they do so, they will be exempted from paying income tax es for previous fiscal years, fee and interest. 

 

Sharma said although there are some 30,000 cooperatives, only 15,000-16,000 have been registered with the tax authority.

 

He said those failing to apply for the current facility will be penalised and asked to pay their entire tax liability. 

 

During the interaction, government officials asked the regulators to help increase the number of tax payers as well as recover tax es through a mechanism under 

which transactions of tax payers would be affected if they fail to clear their tax es.

 

 Finance Minister Koirala asked the regulator to make mandatory that those seeking to register with the regulator should first register with the tax authority.

 

 Finance Secretary Shanta Raj Subedi asked the regulators to tell their licensees that they would not be able to defend them if the tax authority initiates action.

Source: ekantipur.com, Jan 11th 2014

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