IRD, CRO join forces in tax collection drive

KATHMANDU, MAY 02 -

The Inland Revenue Department (IRD) and the Company Registrar’s Office (CRO) are jointly working on a system that will bring new companies registered at CRO automatically under the tax net.

The two sides have signed a memorandum of understanding (MoU) on this system. The US’ aid agency, USAID, is assisting instalation of the software and link at CRO for the purpose.

The new system will reduce the hassle of travelling to tax offices to register a business as every new company registered at CRO automatically comes under the tax net. “The new system is being developed so as to reduce the cost of doing business,” said Tankamani Sharma, director general at IRD. Under the new system, CRO sends a copy of company registration electronically to IRD and also issues an electronic copy of permanent account number (PAN) registration to the company at the time of registration. “The company concerned should then visit the tax office to get the original PAN number once it starts business,” said Bishnu Nepal, spokesperson for IRD.

According to Nepal, IRD has allocated a certain PAN numbers to CRO and new firms receive the same numbers.

IRD plans to implement this system within this fiscal year after the necessary software is installed. IRD has also sought documents of old firms in electronic version to bring the businesses that have registered at CRO, but not at the tax office, under the tax net.

The business community has termed the IRD’s move positive. “The new attempt that exempts us from submitting documents to the tax office ourselves is a welcome one,” said Pashupati Murarka, vice-president of the Federation of Nepalese Chambers of Commerce and Industry. He, however, said the government should focus on reducing papers works in import-export business.

Besides, IRD is also working on establishing a similar mechanism with other agencies such as the Department of Cooperatives, Kathmandu Metropolitan City, Department of Cottage and Small Industries that register firms. “We are holding discussions with them,” said Sharma.

Amid complaints that only a few professionals such as doctors, engineers, lawyers, chartered accountants and consultants, among others, pay proper taxes, IRD has also gathered their details. “We are also taking measures to bring them under the tax net,” said Sharma.

Source: Kantipur