HLTRC to submit report by mid-April

KATHMANDU:

The High Level Tax Review Commission (HLTRC) has said that it would recommend the government to expand the threshold of value added tax (VAT) from the existing Rs two million based on the efficiency of tax offices, book-keeping requirement and the inflation trend of the past few years.

“Since the VAT threshold should be revised on practical basis, we are also considering the inflation trend and accounting standards, among other factors,” Rup Khadka, chairperson of the HLTRC told The Himalayan Times, adding, “We will recommend the government to expand the threshold to some extent.”

The business community has long been demanding that the government expand VAT threshold citing that the scale of the economy has been increasing every year. The government has not made any changes to the VAT threshold after VAT was enacted some 17 years ago.

Informing that the commission will submit its report by mid-April, Khadka said that it will mainly focus on tax restructuring in the federal system that the country is going to adopt very soon.

HLTRC has identified taxes that would be appropriate to be levied at the central (national), state and local level, as per Khadka. “Major taxes like customs, VAT, excise and income tax that affect macroeconomic stabilisation and have income redistributive functions could be levied by the central government but property taxes, service taxes and other local level taxes could be levied by the local governments.”

Likewise, HLTRC has been conducting a study on slashing the number of revenue sensitive products under South Asian Free Trade Area (SAFTA) provision, reducing the process-oriented works and tax-related documents requirement to facilitate traders.

In addition, HLTRC is doing the groundwork to introduce simplified tax system as well as administrative restructuring.

Source: THT