KATHMANDU, May 9, 2012
Kathmandu Metropolitan City Office (KMCO) has failed to collect house and land tax from hotels yet again.
Though the office had recently sent letters to hoteliers instructing them to clear house and land tax, it did not yield the desired results. Hoteliers have refused to clear the tax, saying that existing laws exempt them from house and land tax. They argue that KMC has been trying to collect house and land tax as per the House and Land Tax Act 1962.
Although the Act exempts tax for space used by hotels for accommodation of guests, parking and garden, Hotel Association Nepal (HAN) in its reply to the KMCO has stated that all property inside a hotel compound should be exempted from house and land tax according to new definition of hotels introduced in 1998.
KMCO had asked hoteliers to clear tax dues of other property besides the land being used for accommodation, parking area and garden.
“The older definition of hotel includes place of accommodation, parking area and garden as hotel property. The House and Land Tax 1962 was drafted on the basis of this definition. But the definition has already been changed,” HAN President Shyam Sundar Lal Kakshapati said.
The new definition of the government, developed during classification of hotels in 1998, covers swimming pool, restaurants, health club and other amenities as hotel property. However, the House and Land Tax 1962 has not been amended in line with the definition.
HAN officials say the tax bill, as per the KMCO, would come around Rs 2 to 3 million for star hotels. They said it was unfair on the part of the KMCO to send such letters at a time when the government has promised hoteliers exemptions from other taxes as well.
HAN President Shyam Sundar Lal Kakshapati the KMCO cannot collect tax on property owned by hotels. “We are paying business tax as per the law and exiting laws clearly exempt us from property tax,” added Kakshapati.
Rajya Prakash Pradhananga, chief of revenue division of KMCO said: “We are not talking about business tax. We sent the letters to some star hotels to recover property tax that they owe to the KMCO.” He said the problem arose due to ambiguous laws. “Hotels can´t get exemption from land and house tax unless there is amendment to the act,” added Pradhananga.
KMCO has threatened to seal the service and freeze property ownership as per Local Self-governance Act 1999 if hotels failed to clear property tax. The letter also states that KMCO holds the right to auction off the property to recover outstanding dues.
Source: Republica
Kathmandu Metropolitan City Office (KMCO) has failed to collect house and land tax from hotels yet again.
Though the office had recently sent letters to hoteliers instructing them to clear house and land tax, it did not yield the desired results. Hoteliers have refused to clear the tax, saying that existing laws exempt them from house and land tax. They argue that KMC has been trying to collect house and land tax as per the House and Land Tax Act 1962.
Although the Act exempts tax for space used by hotels for accommodation of guests, parking and garden, Hotel Association Nepal (HAN) in its reply to the KMCO has stated that all property inside a hotel compound should be exempted from house and land tax according to new definition of hotels introduced in 1998.
KMCO had asked hoteliers to clear tax dues of other property besides the land being used for accommodation, parking area and garden.
“The older definition of hotel includes place of accommodation, parking area and garden as hotel property. The House and Land Tax 1962 was drafted on the basis of this definition. But the definition has already been changed,” HAN President Shyam Sundar Lal Kakshapati said.
The new definition of the government, developed during classification of hotels in 1998, covers swimming pool, restaurants, health club and other amenities as hotel property. However, the House and Land Tax 1962 has not been amended in line with the definition.
HAN officials say the tax bill, as per the KMCO, would come around Rs 2 to 3 million for star hotels. They said it was unfair on the part of the KMCO to send such letters at a time when the government has promised hoteliers exemptions from other taxes as well.
HAN President Shyam Sundar Lal Kakshapati the KMCO cannot collect tax on property owned by hotels. “We are paying business tax as per the law and exiting laws clearly exempt us from property tax,” added Kakshapati.
Rajya Prakash Pradhananga, chief of revenue division of KMCO said: “We are not talking about business tax. We sent the letters to some star hotels to recover property tax that they owe to the KMCO.” He said the problem arose due to ambiguous laws. “Hotels can´t get exemption from land and house tax unless there is amendment to the act,” added Pradhananga.
KMCO has threatened to seal the service and freeze property ownership as per Local Self-governance Act 1999 if hotels failed to clear property tax. The letter also states that KMCO holds the right to auction off the property to recover outstanding dues.
Source: Republica
1 comment:
Land and housing, including swimming pools and other amenities of hotel industries should not be taxed as it is a business and have source of income, income tax are already applied to it. Government are playing nonsensible act of earning money faster by drowning industries
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