Call to bring nursing homes under tax net

Kathmandu, January 25:

Lawmakers have asked the government today to bring private schools and nursing homes

into tax net as they are still out of the income tax net despite that fact they are making a huge profits.

The MPs of the parliamentary Finance Committee were of the view that the government should take initiatives to collect income tax from the private schools, nursing homes and clinics. The parliamentarians also assured of their support for formulating legislations, if need be. “The government must devise effective controlling measures to check revenue leakages in sectors like customs and others,” they added.

“They should be effectively monitored even after bringing them into the tax net,” said CPN-UML lawmaker Dr Dilli Raj Khanal.

Finance Minister Dr Ram Sharan Mahat admitted that government has yet not been able to bring the private schools and nursing homes into the income tax net. “It is true that we have failed to bring them into the tax net, although they are making profits,” he said, adding that the ministry of finance would take necessary steps.

Responding to the queries of MPs, revenue secretary Rameshore Prasad Khanal said that those schools registered under the Company Act are regularly paying taxes. However, there is still a large number of schools — registered under the Education Act — that are not paying the taxes,” he said.

The revenue division of the ministry of finance also presented its progress report on revenue generation as of the first half of the current fiscal year. According to the report, the revenue collection in the first six months of the current fiscal year registered a satisfactory growth of 25.4 per cent and the total revenue collection crossed Rs 47.38 billion. The government collected revenue worth Rs 15.02 billion during Poush.

Of the total revenue collection, the tax contributed Rs 39.85 billion, whereas the remaining Rs 7.53 billion was generated from the non-tax sector. Among the sectoral tax contributor, value added tax (VAT) continues to be the largest one with Rs 14.92 billion followed by the customs revenue with Rs 9.67 billion and excise duty with Rs 4.95 billion.

As of the mid-January 2008, the government has released Rs 65.27 billion and spent Rs 55.90 billion out of it. Of the total expenditures, the recurrent expenditures constituted the major portion with 28.24 billion being spent so far.

The government has also made principal loan repayment worth Rs 7.38 billion during the period.