IRD urges taxpayers to utilise waiver facility

KATHMANDU:  Dec 25-

With less than three weeks remaining for the deadline to end, the revenue administration has urged Nepali businesses and professionals to utilise the facility that allows them to get their taxes of previous years cleared by paying the taxes of the last two fiscal years without having to pay any penalties.

The tax waiver facility is applicable till the Financial Ordinance 2013 is valid, that is, till January 14, 2014. After the deadline, taxpayers will have to pay taxes of all the previous years, penalties and interest as well. According to the Inland Revenue Department (IRD), so far only 12,105 taxpayers have availed the facility.

“We are hopeful that more prospective taxpayers will utilise this facility that has

allowed them to get into the tax bracket by paying a fraction of their tax liabilities,” pointed out deputy director-general of IRD Rammani Duwadi, during an interaction organised by the Federation of Nepalese Chambers of Commerce and Industry on the tax waiver here, today.

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After the deadline, small businesses, professionals, cooperatives and brick kilns have to pay income tax and Value Added Tax of the years since they were in business along with penalty and interest.

According to the facility announced in the ordinance, tax payers with annual transactions of up to Rs two million or annual profit of Rs 200,000 and not yet registered at VAT, must submit the income tax returns for fiscal years 2010-11 and 2011-12 within mid-October, 2013. On doing so, they will not be required to file income tax returns for the earlier years. In addition to the income tax waiver, they will also not be charged any penalty and interest on the income of previous years.

Also, if professionals such as doctors, artists, engineers, lawyers and auditors submit income tax returns for fiscal years 2010-11 and 2011-12 within January 14, 2013, then they will not be required to submit the income tax returns of earlier years provided they obtain the Permanent Account Number (PAN).

Cooperatives other than tax exempted ones can also get their books of accounts audited for fiscal 2010-11 and 2011-12, and submit the income tax return for fiscal year 2011-12 within the end of the second quarter of the current fiscal year. If they do so, they will not be required to submit the income tax returns of earlier years and will also not be required to pay penalty and interest on the income of earlier years as well.

Moreover, for businesses that have paid taxes in advance based on previously declared income and whose actual sales made is higher than the declared amount, the government has provided them the chance to be free from the tax liability arising from such mismatch. Such businesses suffering from a mismatch can be free from all liabilities if they pay 1.5 per cent income tax and 2.5 per cent VAT on the difference between the amount they paid as tax and actual tax liability.

“This is an opportunity for small businesses and professionals to get their former tax liabilities cleared and start afresh,” pointed out FNCCI’s vice president Pashupati Murarka during the interaction. “However, the tax administration should start e-payment system so that more tax payers will find it convenient and comply,” he added.

Industrialist Jagadish Rathi who heads FNCCI’s tax and revenue committee also urged the government to review VAT, income tax and customs Acts which have not been amended since more than a decade.

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Source: THT