‘Remove hurdles in taxation’
Kathmandu, August 15:
Despite repeated assurances from government that it would entertain private sector’s suggestions in making taxation system more ‘vibrant and hassles free’, the government did not get any time to look at private sector’s valuable suggestions, that were intended for generating more revenues to the government. Experts and taxpayers have been complaining about the taxation system for long. Narayan Bajaj, president of Institute of Chartered Accountants of Nepal (ICAN) said that prior to budget presentation, every government asks experts’ inputs but later on it forgets. “It has become a worthless ritual,” Bajaj said adding that the issues of lowering customs duties, mechanisms to correct under-invoicing and measures to control smuggling were totally ignored in the ordinance budget this time also like previous instances.
“These measures would have ultimately boosted the revenue, if the government had had adopted them in the budget.” “For example, gold is still being smuggled from India into Nepal but the government do not work out any strategy to legalise the bullion business,” he said. “The government has increased income tax slab from Rs 85,000, to 100,000, and from Rs 100,000, to Rs 125,000 for unmarried and married individuals. However, it did not pay any attention to the private sector’s request for making multiple rates for VAT,” complained Mahesh Agrawal, immediate past president of Nepal Chamber of Commerce (NCC). “Not only that the government has assured the private sector and taxpayers (before the budget) to lower customs duties and measures to correct ills existing in the taxation system but that is not materialized in the budget.”
As the country is moving towards liberal economy, the customs duties issues needs serious consideration, he suggested. Kiran Sakha, president of Garment Association of Nepal (GAN) commented that despite the assurance of bringing export policy and incentives, budget has neglected the issue completely. “Unpractical policies still exist in our taxation system, but the government has taken no initiative to improve it.” Namgyal Lama, president of Nepal Freight Forwarders Association (NEFFA), also has complains to the government. “Exporters have urged to remove VAT on trading houses (TH) but it still is in existence, that has forced the closure of a number of THs already. The government charges Rs 500 per shipment as customs duties for long destined shipments.” Presently, the government collects about Rs 70 billion as revenue, which is 15 per cent of the total GDP. Even after VAT implementation since 1997, the number of taxpayers has not crossed 32000. No senior officials from Inland Revenue Department (IRD) and ministry of finance were available, when phoned, to comment on the entrepreneurs’ complaints.