Institutions pay Rs 39 billion in tax
KATHMANDU, NOV 21 -
Institutional taxpayers contributed 59 percent to the country’s income tax collection in the last fiscal year. They Institutions pay Rs 39 billionpaid Rs 39 billion in income tax out of total Rs 67 billion collected in 2012-13.
The Inland Revenue Department (IRD), in its annual report, has lamented continued low contribution of individual taxpayers to income tax. Personal and proprietorship firms contributed Rs 17.40 billion — 26 percent of total income tax collected.
“Globally, there is a trend of increasing remuneration-based income tax and reducing reliance on institutional tax,” stated the report. “Remuneration-based income tax should have bigger contribution to tax revenue, but the collection has not been as expected.”
Investment income tax accounted for 14 percent of total inco-me tax collection, other types of income taxes 1 percent, and windfall gain income tax 0.06 percent.
IRD Director General Tankamani Sharma attributed the low income tax collection from individuals said low taxable income of most of the Nepalis.
“We cannot bring those who go abroad to make earning under the income tax net, and in Nepal, there are not many people earning enough to pay income tax,” he said. “On the other hand, only a few professionals like doctors, lawyers and chartered accountants, among others, have been brought under the tax bracket.”
While the number of practicing lawyers in Nepal is estimated to be more than 10,000, only 1,000 have taken permanent account number (PAN), and only 100 law firms have registered at value added tax (VAT), according to IRD officials.
However, the number of doctors, auditors and engineers acquiring PAN are relatively higher. As of last fiscal year, 2,500 engineers, 7,600 doctors and 7,000 auditors have taken PAN.
“The lack of effective monitoring, not encouraging participation of proprietorship firms and their investment, and failure to bring them under tax net resulted in low tax collection from individuals,” the report says.
Personal income tax includes the tax imposed on personal income and from proprietorship firms, capital gain tax from and tax on remuneration, and social security tax. The government collected Rs 8.32 billion in remuneration-based income tax last fiscal year.
Individuals and proprietorship firms have taken highest number PAN as of last fiscal year. According to IRD, the number of active PAN belonging to individuals and proprietorship firms stands at 542,604, followed by private limited companies with 108,042. Non-government organisations have 27,878 active PAN.
(Source: The Kathmandu Post)
