Discount scheme attracts firms to participate in tax net
KATHMANDU:
A majority of business firms who were alleged of evading value added tax (VAT) have been found to have capitialised on the various discount schemes extended by the Fiscal Act 2014-15.
Following a mismatch on transactions, the Inland Revenue Department (IRD) had started investigation into such cases — 3,680 in total, according to Chandra Kala Paudel, deputy director general as well as spokesperson of IRD.
Altogether 6,464 firms as well as individuals registered at VAT submitting Rs 168.8 million till the first half of the current fiscal, as the Act extended the time for participating in the tax net voluntarily till mid-January of this year.
“The Fiscal Act offered those firms to be registered at VAT by submitting only three per cent of VAT (out of 13 per cent) and two per cent of income tax of mismatched (varied) amount.”
Likewise, of the 2,784 new VAT registrants, 17 are crusher plants, two are educational consultancies and the rest are individuals, as per IRD.
The Fiscal Act allowed taxpayers who had not declared transaction and income report to the tax offices while having the taxable income or transaction to participate in VAT and income tax net by submitting the last three fiscal’s taxes. The Fiscal Act exempted all the penalties and interest amount, among others, for such taxpayers.
“Under this scheme, 2,765 taxpayers in the VAT net and 12,332 taxpayers in income tax filed Rs 1.9 million and Rs 5.2 million, respectively,” Paudel told The Himalayan Times.
Under the scheme of discounts, IRD collected a total of Rs 270.3 million in revenue from 6,464 firms in VAT and 14,183 individuals in income tax. Similarly, 15,221 firms and individuals took permanent account number (PAN) under the scheme. Utilising the scheme extended by Fiscal Act, 1,837 professionals registered at PAN.
Likewise, 563 cooperatives came under the tax net as the Fiscal Act provided offer of participating in tax net by submitting income tax and interest tax of last three fiscals.
Cooperatives that participated under the scheme did not have to file tax for more than last three fiscals. As government decided to bring crusher plants under VAT since 2012-13, five of them came under VAT net submitting excise of Rs 8.15 million. The tax amount is of earlier fiscal 2012-13, when crusher plants used to register in excise.
The government this year wrote off all the interests and penalties of the due tax amount (excise) of crusher plants to encourage them to register at VAT. Similarly, 17 fresh crusher plants that did not have any dues also registered at VAT.
Business firms with annual transaction of over Rs two million must register in the VAT mandatorily, and they can collect the VAT surcharge from consumers at the point of sale.
Altogether, 425 cooking gas dealers and cigarette dealers identified in the income mismatch submitted Rs 1.82 million as the government provided an offer to enter the tax net by submitting 0.5 per cent of the mismatch amount.
“The government launched such schemes to increase tax participation,” Paudel further said.
Source: THT
