MoF to spend Rs 500m on VAT inspectors
Kathmandu, February 16:
Ministry of finance (MoF) is all set to recruit 1000 Value Added Tax (VAT) inspectors aiming at collecting Rs 2 billion revenue. The MoF is planning to spend upto Rs 500 million on
the VAT inspectors to boost revenue collection in this fiscal year.
According to sources at the ministry, the decision to appoint 1000 commerce graduates as VAT inspectors, was taken during last week’s cabinet meeting. However, it will be implemented as a three-month ‘trial’ in the beginning. The employees will be responsible to check VAT bills in business centres, departmental stores and shops.
Government will have to spend five million rupees in a month for these temporary staff. One VAT inspector will get Rs 5000 per month and has authority to provide Rs 25 per bill to a buyer as incentives, which can be termed as ‘tips’. Meanwhile, VAT inspectors can fine upto Rs 5000 to a businessman, who do not abide by the directives of the government.
The ‘modality and other procedures’ are still being worked out, said the source. Some of the officials, on condition of anonymity, also disclosed that there is no such law to appoint temporary staff. “What is crucial is that the ministry is ready to spend upto Rs 500 million to boost revenue collection before the end of the current fiscal year,” they said.
Some four years ago, Dr Ram Sharan Mahat as a finance minister had also tried to work out something like this to boost revenue collection with financial assistance from DANIDA. However, it could not work out.
Currently, there is a practice that tax officers are given ‘discretionary power’ for tax assessment which has been complained by businessmen for various reasons.
R M Singh, immediate past president of Nepal Freight Forwarders Association (NEFFA) commented that the government does not have sufficient money and is trying its best to collect revenue.
“The initiative to collect VAT and other taxes by recruiting VAT inspectors
will ultimately discourage businesspersons and will affect business sector as a whole,” he said.
“Forceful rules would affect revenue collection in a long run,” Singh added.
Singh said that the initiative may fuel corruption further which is already rampant in tax administration. Minister Jyoti also should understand our reality at the implementation level, he suggested.
Suresh Basnet, general secretary of Nepal Chamber of Commerce (NCC) said, “Business sector should also be responsible and pay taxes to boost revenue. Government’s new mechanism is good in revenue perspective,” he said.