KATHMANDU, JUNE 2

The government has ordered businesses and individuals to clear taxes and file returns of the current fiscal year by June 7, although businesses have remained shut for almost two-and-a-half months due to the ongoing lockdown to prevent the spread of COVID-19.

Publishing a notice today, the Inland Revenue Department has asked businesses and individuals to submit the second instalment of income tax of the current fiscal year by mid-June and value added tax and excise duty till mid-March and mid- April, respectively, by June 7.

The notice adds that failure to meet the deadline for filing tax returns and clearing tax dues of previous months will result in charges, additional fees, interest and penalty.

After the government imposed the nationwide lockdown with effect from March 24, it deferred the deadline to clear taxes — VAT and excise (till mid-March) from April 7 and income tax from April 12 — to May 7. As the lockdown continued, the deadline was extended till June 7.

However, the government did not extend the tax payment deadline for businesses and the public while extending the lockdown till June 14.

IRD Director General Binod Bahadur Kuwar said businesses were asked to clear taxes and submit tax returns by June 7 in line with the government’s decision that extended the lockdown but it did not extend the deadline to clear taxes.

Sources at the Ministry of Finance said IRD published the notice ordering businesses to clear taxes and file returns on the direction of Finance Minister Yubaraj Khatiwada, who is under pressure to generate financial resources to combat the spread of the novel coronavirus and unfavourable circumstances caused by the pandemic.

Revenue Secretary Ram Sharan Pudasaini said the government had already deferred tax payment deadline for three months and it could not extended it further as the government was under pressure to generate financial resources.

Pudasaini said the government was compelled to collect taxes to ramp up health infrastructure and provide medical care to COVID-19 patients, to provide relief to victims of the crisis and to fill the financial gap as a result of different tax exemptions announced for industries.

“The government has multiple financial responsibilities in because of the present crisis.

Taxes collected are also needed to pay salaries of civil servants and other state functionaries,” said Pudasaini.

He added that the government was only asking businesses to clear taxes that they were required to pay three months ago.

A version of this article appears in e-paper on June 3, 2020, of The Himalayan Times.