KATHMANDU, APR 01 -
Finance Minister Surendra Pandey said on Thursday that the even government employees were hesitant to take permanent account number (PAN) although they should be responsible for collecting taxes from the general public.

"People of every walk of life remain fearful of the tax mechanism," he said, while releasing the 'Income Tax Guideline -- 2010 prepared by Inland Revenue Department.'

The government aims to bring people of all professions into the income tax net during the tax participation year of 2009/10. Pandey stressed the need to strengthen the capacity of tax administration in order to tackle the new ways of tax evasion through the use of technology. 

However, he lauded the increasing contribution of income tax to the overall tax collection saying the reforms in the taxation system over the last eight years made it possible.

The government collected income tax of Rs. 27.54 billion in the fiscal year 2008/09 against the Rs. 19.07 billion the previous year. After the government

introduced the new Income Tax Act in 2002, the tax regime has been simplified.

The Finance Minister also reminded tax payers that Nepal's income tax was lower than many other countries. "The government has a policy of expanding tax net rather than tax rate itself," Pandey said. He also termed the tax system on the basis of self-assessment of taxpayers as 'democratic.'

Finance secretary Rameshwor Khanal said the government introduced the electronic taxation system to ensure transparency as well as cut down the discretionary powers of tax officials and intimidation. 

"It is now the responsibility of taxpayers to be transparent by implementing the provision of billing system on sales of goods," he said. The enforcement of value added tax has not been so effective due to failure on the part of the government to enforce billing system in business transaction.

Khanal said that the government is committed to simplifying the tax system as far as possible. Entrepreneurs have asked the government to exempt export industries from income tax for 2-3 years given the declining exports against imports causing huge balance of payment (BoP) deficit. The country's BoP deficit stands at around Rs. 19 billion as of mid- January this year.


Posted on: 2010-04-02 07:51

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