E-Kantipur

KATHANDU, AUG 07 -

The Finance Ministry may not have achieved its revenue collection target last fiscal year, but its target of bringing more businesses and individuals under the tax net was attained.

Inland Revenue Department (IRD), the agency that looks after the inland revenue administration, added a total of 177,579 new taxpayers in 2010-11. The target, according to IRD, was of adding 150,000 new taxpayers.

“The number of new taxpayers surpassed the target set for the last fiscal year,” said Rajan Khanal, director general of IRD. The department that had targeted to bring 50,000 additional institutional taxpayers under the income tax net succeeded in adding 55,478 firms/institutions. Last year, the number of individuals registered under the income tax also surged by a whopping 115.59 percent. A total of 122,101 individuals were registered against the target of 100,000.

The last fiscal year also saw 14,785 existing taxpayers being upgraded to the Value Added Tax (VAT) payers’ list. A majority of those registered in the VAT were small and medium enterprises.

Top IRD officials attribute this success in adding more taxpayers to a number of factors including the probe against Value Added Tax (VAT) evaders, expansion of IRD service and the impact of tax compliance year (fiscal year 2009-10).

One of the key measures taken by IRD last year was the action against tax evaders by using fake VAT receipts. The government has already slapped tax and fines of Rs 2.7 billion to 216 firms that were involved in tax evasion using fake VAT receipts. “This measure might have forced many tax evaders to come into the tax net,” said Khanal.

According to IRD officials, the impact of the tax compliance year 2009-10 was also seen last year. The department had announced FY 2009-10 as tax compliance year. “The huge rise in the new taxpayers’ number is the result of the tax compliance year,” said Laxman Aryal, deputy director general of IRD.

Top IRD officials say the department last year reached to numerous potential taxpayers including teachers, civil servants, army personnel and lawyers, among others, encouraging them to get the permanent account number (PAN). As a result, the income tax collection surpassed the target.

However, delayed budget presentation and slowdown in the import growth hit the department’s VAT and excise duty target. Although the IRD almost met the VAT target, it failed to meet the excise duty goal.

Posted on: 2011-08-07 09:56

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