Government advised to form alternative tax settlement body


The government has been suggested to form an Alternative Tax Dispute Settlement body to expedite the process of settling tax disputes between the enforcement agency and taxpayers.

Submitting a report to Finance Minister Ram Sharan Mahat at the Ministry of Finance (MoF) on Friday, the Revenue Advisory Committee — a committee led by the joint secretary of MoF’s Revenue Division and comprising experts and private sector representatives — said that though there is a provision of administrative review of the disputes, the number of cases settled through this mechanism is very low.

As per the current provision, a taxpayer must deposit 33 per cent of the tax amount while applying for administrative review with the tax enforcement agency. Similarly, taxpayers need to deposit 50 per cent of the tax amount while filing a case at the Revenue Tribunal — quasi-judicial body for revenue dispute settlement.

Both these provisions have been hurting taxpayers. Tax payers have been complaining that the administrative review mechanism always favours the tax enforcement agencies and settling disputes through the tribunal is a lengthy process.

“If we set up a separate body to settle tax disputes, it will help expedite the settlement of disputed taxes,” said Laxman Aryal, chief of Revenue Division of MoF. “This mechanism should be set up promptly to settle the disputes and in the long run we’ve to set up a revenue board for effective tax enforcement.”

The report submitted to the finance minister today has also recommended the government to launch schemes to encourage tax participation and enhance the capacity of the enforcement agencies for effective levying of taxes and control revenue leakages.