Nepal | July 14, 2020

Tax authorities press businesses to clear dues

Government under pressure to meet even recurrent expenditure

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As the government is reeling under immense pressure to meet financial liabilities, including recurrent expenditure amid low revenue collection, the Ministry of Finance has started pressuring industrialists and businessmen to clear tax dues.

Taxpayers are reluctant to pay tax dues following a recent order from the Supreme Court which allowed taxpayers to clear tax dues within a month after the lockdown is completely lifted.

The apex court verdict has hit the government’s financial position, which was already poor due to low revenue collection after business activities were halted for almost three months amid the nationwide lockdown imposed by the government to prevent the spread of the coronavirus pandemic.

As a result, the MoF has started contacting industrialists to pay taxes stating that the government is under pressure to meet even recurrent expenditure.

An industrialist seeking anonymity said MoF and different tax authorities had been asking them to deposit tax dues stating that the government was under pressure to manage financial liabilities.

However, the industrialist said the government was only concerned about its problem and had been overlooking problems of businesses and their financial liabilities.

Meanwhile, officials at the finance ministry said businesses should support the government as tax collection was the only source for running the state administration.

“Though market activities have resumed and the lockdown has eased, tax collection has been halted completely after the recent verdict of the apex court. Though we cannot force business community to clear tax dues, those who are in a position to clear their taxes should clear them. It is their responsibility to do so,” said a source at the MoF, who did not want to be named.

The government had asked businesses to clear tax dues by June 21, but businesses do not have to comply with that following the verdict of the Supreme Court.

Meanwhile, Shekhar Golchha, senior vice-president of the Federation of Nepalese Chambers of Commerce and Industry, said both the government and private sector should support each other during hard times.

“Both the government and business community are facing difficult times in their own ways. While those businesses and industrialists who are in a position to clear taxes should clear them and help the government, the government should not force any person or business to deposit tax dues at this critical juncture,” he said.

A version of this article appears in e-paper on June 19, 2020, of The Himalayan Times.

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