Income tax slab revised
Kathmandu, May 28
A single person earning Rs 29,167 per month and a married person* earning Rs 33,333 a month will not have to file income tax from the upcoming fiscal 2016-17, as the government has revised the income tax slab.
The Financial Bill tabled in the Parliament on Saturday has raised the annual slab of income tax to Rs 350,000 for a single person and to Rs 400,000 for a married person. The existing individual income tax slab for a single person is Rs 250,000 and for a married person is Rs 300,000. Changes were made to the existing income tax slab along with salary increment for government staffers. The government has increased the salary of government staffers by 25 per cent, which will be come into force from the next fiscal.
More importantly, the government, through the Financial Bill, has tried to encourage environment-friendly transportation in the wake of the fuel crisis in the country. It has substantially reduced customs tariff on electric vehicles. The government has cut customs tariff of electric buses (public transportation) to only one per cent of the cost price and 10 per cent for jeeps, cars, vans and three-wheelers. Earlier, the tariff levied on electric vehicles was 50 per cent lower than on diesel and petrol engine vehicles. The government has also been waiving excise duty on electric vehicles that is imposed on diesel and petrol engine vehicles.
Although the new fiscal year will begin after one-and-a-half months, the new tax provisions of customs, excise, infrastructure tax and road maintenance tax set by the Financial Bill will come into effect from today itself.
The government has been levying 30 per cent customs tariff (of the cost price) on public transportation vehicles and 80 per cent for jeeps, cars and vans. However, the government has not made any changes in the tariff of hybrid vehicles. Importers of hybrid vehicles have been enjoying 25 per cent lower tariff than diesel and petrol engine vehicles.
Along with enforcement of the new law, an electric car that used to cost around Rs 1.4 million previously will now cost only around Rs one million, according to traders.
Similarly, the government has hiked the road maintenance tax that is collected at customs points while importing vehicles from the existing five per cent of cost price to seven per cent. Besides, the government has also levied five rupees per litre on import of petroleum products as infrastructure tax, on top of other taxes to finance infrastructure projects.
Similarly, the price of cigarettes, beer, wine and alcoholic beverages will go up as the government has hiked excise duty on cigarettes by 10 per cent, beer by nine per cent and wine by 13 per cent. In addition, excise on alcohol has been increased by 30 per cent for imported products and 15 per cent for domestic products.
The government has increased the threshold of value added tax on service transaction from the existing Rs one million to Rs two million. This means that those business people whose annual transaction does not exceed Rs two million will not have to be registered in the VAT net and they will not be obliged for book-keeping of their transactions.
The government has also provided some relief for businesses with annual turnover of around Rs 10 million. Such businesses will not be obliged to audit their transactions. The government has also reduced the transaction tax by half and now traders/commission earners will have to submit only 0.75 per cent (for goods) and 0.25 per cent (for services) from their annual turnover to the respective tax offices.