Kathmandu, January 23

Tootle, the ride-sharing service provider which is gaining popularity in Kathmandu valley, is likely to face huge penalty, as the taxman has initiated probe into its tax evasion case.

The Inland Revenue Department (IRD) today said it has started investigation into the possible evasion of value added tax by the ride-sharing company.

Media today reported that Tootle had collected VAT from its service providers for 19 months but had not deposited the fund in state coffers. The company was also found to be collecting VAT without getting the permit to do so.

If the company is found guilty, it will be fined amount equivalent to what it has collected in the form of VAT. It will also have to pay additional 25 per cent of its tax liability to the taxman and deposit the amount it had collected as VAT in state coffers.

“As per the existing law, fine of up to 20 per cent of the tax liability is imposed on VAT evasion cases if a firm

has gotten the permit to collect the tax. But it appears Tootle is not a VAT-registered company so it will have to pay more fine,” said IRD Director Rishi Ram Pokhrel.

But before imposing fine on Tootle, the IRD will finalise the tax liability of the company by going through its financial transactions.

“If the company fails to pay tax accordingly, the government can freeze the company’s bank account and other properties,” said Pokhrel.

Tootle was imposing VAT on its service providers since its inception in January 2017 till July 2018. Sixit Bhatta, the company’s chief executive officer, has acknowledged this to media.

Yet he told media his company was unaware of the government’s taxation system and had stopped collecting VAT since July 2018.

Sixit denied talking to THT on this issue.