KATHMANDU: Kathmandu Metropolitan City (KMC) has not been able to collect taxes as expected.

"The KMC is yet to bring all entrepreneurs into the tax net, despite legal authority," said Sadhu Ram Bhattarai, chief, Finance Management Division, KMC. "Only a small number of entrepreneurs are our taxpayers."

The KMC lacks both specific data on entrepreneurs operating in the city and a mechanism to collect tax from them. "The entrepreneurs come to pay taxes only when they need recommendation letters, while sending their wards for study abroad or on foreign visits for example," said Bhattarai. "Our mechanism is almost defunct regarding revenue collection under this head," he added.

According to KMC sources, about Rs 500 million can be collected from the entrepreneurs annually if the law is well enforced. "Only about Rs 10 million is being collected in this category every year," said Basanta Acharya, legal officer at the KMC. "Rs 10,000 is the maximum amount taxed on an enterprise," he said. "If not collected within a year, the law does not allow the same to be collected next fiscal," he added.

Total annual income of KMC stands at an approximate Rs 1.1 billion while the civic body presents its annual budget of about Rs 2 billion. "If we generate revenue systematically, we don't need to borrow to fund our programmes," said Bhattarai, who was recently appointed the department chief. "We need the help of the government in harnessing total revenue potential though," he said, accusing it of not cooperating with the KMC by bringing out clear vision and policies.

"We are planning to put in place an efficient revenue collection system by implementing the existing law on about 80 heads. We are also preparing to supervise hoarding boards and increase revenue in this sector," he added. "It is necessary to streamline tax on house rent."

Revenue collection (in rupees)

Jul 15-Aug 15 Oct 15-Nov 15

Entrepreneurship Rs 84,720 Rs 5,505,318

Asset evaluation Rs 252,142 Rs 836,786

Site map approval Rs 6,103,849 Rs 29,644,454

House rent Rs 599,193 Rs 1,754,773

Real estate Rs 16,113,867 Rs 83,869,397

Total Rs 31,287, 401 Rs 172,447,719