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After awareness campaign, it is now lotteries to spur billing
KATHMANDU, JAN 03 - This is one among several ‘hit and trial methods’ targeted at better enforcement of the billing system.
After the failure of several awareness campaigns and the less than expected outcomes of television commercials and radio jingles, the government is now all set to bring in a lottery system.
Under the system, a consumer with a Rs1000-worth VAT (Value Added Tax) Bill can win up to Rs100000 every month. In addition to this there are fifteen more cash prizes – two worth Rs 20000 each, three worth 10000 each and ten worth Rs3000 each.
"As in the past our efforts are to aware consumers to ask for purchase invoice," Rup Khadka, a consultant with VAT-DANIDA project said. According to him the new system would come into enforcement from mid-January.
The concept of introducing lottery system originally came two years ago in the government’s annual plans and policies.
The Inland Revenue Department will affix eight different booths inside the Kathmandu Valley for the purpose. According to the scheme, each of these booths will issue a free-of-charge lottery ticket against a VAT bill worth Rs1000 to a consumer.
The lottery tickets will be reshuffled to select 16 lucky winners of the cash prizes.
Though noble attempt in Nepal, the system is not new to the world. Countries like Argentina, Turkey, Thailand, South Korea, and many others have already tired with the lottery system in VAT bills. While some failed, some are gaining from it.
This will help develop Value Added Tax as the backbone of Nepali revenue system, experts say and further add the attraction of Rs 100,000 can even help in checking the under valuation of goods at the customs point.
"We are upbeat that this scheme will tilt people towards purchase bills, and help check those who escape from VAT," Ishworman Shrestha, Deputy Director General at Inland Revenue Department said.
Currently around 30,000 firms have been registered with the Inland Revenue Department for VAT.
This figure, the expert claim, is less than 30 percent of total VAT-potential firms of the country.
The government, introducing VAT after scraping the then sales tax, hotel tax, contract tax and entertainment tax in 1997, had vowed to mobilise almost 40 percent of the total revenue through VAT.
The total contribution of VAT however, has never touched 25 percent of total revenue mobilisation. During the last fiscal year, a total of Rs13.58 billion was mobilised through Value Added Tax.
The VAT revenue made 23.72 percent of total revenue mobilisation and 2.96 of the Gross Domestic Product. Of the total VAT revenue mobilisation, 64.8 percent is collected on at customs during importing goods and services and the 35.2 percent in the domestic VAT.Posted on: 2004-01-04 04:36
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