IRD devising taxpayer-friendly system

KATHMANDU, APR 19 -

The Inland Revenue Department (IRD) has stepped up efforts to make the tax administration more taxpayer-friendly amid complaints about difficulty in compliance and a massive evasion of tax.

The IRD has formed a steering committee, led by the department’s Director General, Tankamani Sharma, as well as

different sub-committees, to look into different departments. Around 80 officials, including deputy director generals

and chief tax administrators at Inland Revenue offices, are working on measures to be taken.

“The measures to be taken will address the grievances of taxpayers and increase compliance by them,” said Sharma, indicating to measures that the IRD is considering in the varied areas, including taxpayer service, intelligence enforcement and investigation, tax audit, legal system, information technology (IT) among others.

The Tax Compliance Cost Survey, carried out by the International Finance Corporation (IFC) recently, has concluded that small businesses have to bear substantial compliance costs while paying taxes. “The compliance cost is the highest for value added tax (VAT) among the various types of taxes,” says the survey report.

Sharma said that the IRD has planned to overhaul its own internal system to make tax administration more automated and hassle-free with efficient tracking system by addressing the shortcomings of tax administration that give excuse to the taxpayers to evade tax.

One of the components of the reform plan will be sourcing out of certain tasks to the private sector too, except for the core tax-related works.

In order to curb tax evasion, the IRD has planned to establish a mechanism that would track such activities and enable the tax administration to initiate action against those found guilty.

The IRD, which has tracked use of fake bills with the software system, has now decided to recover Rs 6.59 billion in unpaid taxes from 518 firms and companies.

However, Sharma said that they have identified many shortcomings in tax administration during IRD’s recent recovery drive to prevent tax evasion. “We will be adopting both long- and short-term strategies to address these shortcomings,” said Shrama. The Sharma-led committee has decided to work in cooperation with the GIZ to adopt long-term vision of tax system in the country.

Source: Kantipur