Himalayan News Service

Kathmandu, March 17:

Nepal Bankers’ Association (NBA) has refuted recent media reports on tax evasion through bonuses given to employees by various private sector commercial banks. Issuing a press statement, NBA has clarified that bonuses given to employees during the period of 1992-2001 were as per the existing rules and regulations and banks have not evaded any tax, due to the government. An amendment in Bonus Act in 1992 put a ceiling on bonuses that can be given to employees, while mandating that the remaining amount has to be deposited at the Employees Welfare Fund. “All banks have been deducting tax on bonus at source. The remaining amount being deposited at the welfare fund,” says the release. Banks have been allocating money from the fund to employees according to their needs, as specified by the Bonus Regulations and Labour Regulations.

The amendment to the Income Tax Act in 2002 made it compulsory to levy income tax on money being given from the welfare fund to employees. The banks, the press release claims, have been following this rule as well. NBA has stated that all records at banks are being constantly updated, while clearance reports for all transactions, following audit and tax, are also being prepared. “All transactions being carried out by banks are transparent. Banks continue to be prudent, while being the largest corporate taxpayer.” The banking sector contributed over one billion rupees as corporate tax and an additional Rs 150 million in income tax from their employees in the fiscal 2003-04.