Draft of Property Tax Bill ready
KATHMANDU, NOV 19 -
A technical committee formed by the Ministry of Finance (MoF) to write a new Property Tax Bill has prepared a draft which includes a provision requiring all Nepalis to declare their assets.
The government’s move follows demands by the business community which, stung by accusations of endemic tax evasion, has been insisting that property declaration be made mandatory for everybody.
The budget for the current fiscal year has announced introducing a provision of property declaration. It states, “The habit of keeping records of the sources of property and its purpose has not yet developed among the Nepali people. In order to address such problems, the Property Tax Act will allow an individual, family or company to make a voluntary disclosure of all the fixed and movable properties including land, jewellery, cash, bank deposits, lending, share investments and vehicles to the Inland Revenue Office of the Government of Nepal after paying a certain percentage of tax.”
Two months ago, the MoF had formed a taskforce under the coordination of Laxman Aryal, deputy director general of the Inland Revenue Department, charging it to complete the task by mid-November.
“We have completed a draft of the proposed act,” said Aryal. “Once it is finalized after holding discussions with the private sector and other stakeholders, we will submit it to the ministry.”
According to a member of the technical team, the proposed act will label all undisclosed properties as illegal and impose grave punishment to the owners.
As per the draft, the government will introduce a mechanism to trace the records of all forms of property including bank balance, investments in gold, bonds, shares, land and houses and antiques, among others, so that the property cannot be hidden.
Aryal said that the purpose of the new act was to be specific and to introduce a modern system in property taxation. “The aim is also to make the upcoming act compatible with other tax related laws,” he said.
Another IRD official, who wanted to remain anonymous, said that the proposed bill had also made some recommendations on how property should be evaluated and how information about people’s property could be accessed.
Although there is a Property Tax Act, 1990 which was not implemented, a high-level taskforce headed by a former chief commissioner of the Commission for Investigation of Abuse of Authority (CIAA) Surya Nath Upadhyay had recommended earlier that the existing act was outdated and that a new one should be drafted.
Upadhyay’s team had also prepared a draft of the proposed act, and the present technical team had been told to refer to it, according to Shanta Raj Subedi, joint secretary of the MoF.
An MoF official said that the current act remained unimplemented due to lack of a proper database to examine an individual’s property and a mechanism to enforce it.
Source: Kantipur
