KATHMANDU, MAY 1, 2012
Home owners in cities and urban centers would soon need a separate rent tax card and use it to settle rent, much in the same way as they pay utility bills through cards issued by various utility service providers.
Unveiling the new arrangement Inland Revenue Department (IRD) on Monday said it has made the possession and use of card mandatory for all landlords who enjoy income through rents.
“We are distributing the cards from Wednesday itself. All house owners in the Kathmandu Valley and outside must get it,” said Tanka Mani Sharma, director general of IRD.
Officials said the present campaign aims to motivate the taxpayers to voluntarily comply with the new arrangement. But eventually IRD envisages to make it mandatory, using it as a tool for enforcing rent tax - one of the least complied forms of tax in the country.
“In the medium term, those not possessing the card would be regarded as evading taxes and will be slapped fine,” said a source.
In order to make sure that landlords comply, IRD also issued a new directive. Those possessing the card would need to get it certified and sealed by the tax office once every year, a new provision which has been put in place to ensure compliance of rental tax.
Rental tax has been in place since decades and existing income tax law demands landlords earning rental income by leasing out the space of their building or land to pay 10 percent of the income as rental tax.
However, its compliance has been negligible. According to Sharma, except for the commercial buildings and landlords who have been renting the space to corporate entities and government offices, others have barely complied with the law nationwide.
Despite such situation, officials clarified IRD will not act tough against the non-filers until it bring a large number of rental taxpayers in its net and builds its won database.
To make it easy for taxpayers to get the card, Sharma said IRD has tied up with local bodies and will be distribute the cards from ward offices, taxpayers´ service center and Inland Revenue Offices (IROs) in the Valley and urban centers outside the Valley.
“Land owners in Kathmandu can get the card from 48 outlets, including 35 ward offices and 13 taxpayers´ service centers,” said he. In districts where taxpayers´ services do not exist, they can collect the card from local ward offices, municipality, sub-municipality and IROs.
In the initial phase, IRD plans to bring at least 25,500 rental taxpayers into its fold through the issuance of the card by mid-July, 2012. Of that, it targets to register at least 20,500 rental taxpayers in the Kathmandu Valley alone.
“In the new fiscal year we will also organize temporary camps, if required, in different parts of the country to reach out to the taxpayers,” Sharma stated.
Kedar Bahadur Adhikari, executive director of Kathmandu Metropolitan City (KMC) Office expressed hope that KMC, through the tie up, would also be able to enforce the 2 percent rent tax that it separately charges on the landowners.
Finance Minister Barsha Man Pun, who unveiled the new Directive on collection of rental tax, urged the house and other property owners to act in a civilized manner and pay due tax.
Although he did not categorically answer a question on how the fresh enforcement drive would impact the apartments´ rental charges, he said the rental tax was not new and has been around for decades. “It is just that we are enforcing it in a planned manner now,” said Pun said.
IRD officials, on the other hand, said it should not have any impact on rental charges.
Source: Republica
Home owners in cities and urban centers would soon need a separate rent tax card and use it to settle rent, much in the same way as they pay utility bills through cards issued by various utility service providers.
Unveiling the new arrangement Inland Revenue Department (IRD) on Monday said it has made the possession and use of card mandatory for all landlords who enjoy income through rents.
“We are distributing the cards from Wednesday itself. All house owners in the Kathmandu Valley and outside must get it,” said Tanka Mani Sharma, director general of IRD.
Officials said the present campaign aims to motivate the taxpayers to voluntarily comply with the new arrangement. But eventually IRD envisages to make it mandatory, using it as a tool for enforcing rent tax - one of the least complied forms of tax in the country.
“In the medium term, those not possessing the card would be regarded as evading taxes and will be slapped fine,” said a source.
In order to make sure that landlords comply, IRD also issued a new directive. Those possessing the card would need to get it certified and sealed by the tax office once every year, a new provision which has been put in place to ensure compliance of rental tax.
Rental tax has been in place since decades and existing income tax law demands landlords earning rental income by leasing out the space of their building or land to pay 10 percent of the income as rental tax.
However, its compliance has been negligible. According to Sharma, except for the commercial buildings and landlords who have been renting the space to corporate entities and government offices, others have barely complied with the law nationwide.
Despite such situation, officials clarified IRD will not act tough against the non-filers until it bring a large number of rental taxpayers in its net and builds its won database.
To make it easy for taxpayers to get the card, Sharma said IRD has tied up with local bodies and will be distribute the cards from ward offices, taxpayers´ service center and Inland Revenue Offices (IROs) in the Valley and urban centers outside the Valley.
“Land owners in Kathmandu can get the card from 48 outlets, including 35 ward offices and 13 taxpayers´ service centers,” said he. In districts where taxpayers´ services do not exist, they can collect the card from local ward offices, municipality, sub-municipality and IROs.
In the initial phase, IRD plans to bring at least 25,500 rental taxpayers into its fold through the issuance of the card by mid-July, 2012. Of that, it targets to register at least 20,500 rental taxpayers in the Kathmandu Valley alone.
“In the new fiscal year we will also organize temporary camps, if required, in different parts of the country to reach out to the taxpayers,” Sharma stated.
Kedar Bahadur Adhikari, executive director of Kathmandu Metropolitan City (KMC) Office expressed hope that KMC, through the tie up, would also be able to enforce the 2 percent rent tax that it separately charges on the landowners.
Finance Minister Barsha Man Pun, who unveiled the new Directive on collection of rental tax, urged the house and other property owners to act in a civilized manner and pay due tax.
Although he did not categorically answer a question on how the fresh enforcement drive would impact the apartments´ rental charges, he said the rental tax was not new and has been around for decades. “It is just that we are enforcing it in a planned manner now,” said Pun said.
IRD officials, on the other hand, said it should not have any impact on rental charges.
Source: Republica
No comments:
Post a Comment