IRD plans rent, market survey

KATHMANDU, OCT 31: 

The Inland Revenue Department (IRD) is planning to conduct a house rent and market survey within this fiscal year with an aim to expand the tax net.

“House rent surveys will be conducted in metropolitan and sub-metropolitan cities, municipalities and municipality-oriented areas by all offices in order to collect taxes on rental income,” said deputy director general at the department Bishnu Prasad Nepal.

IRD has also planned to provide a separate personal electronic Permanent Account Number (e-PAN) during the survey, he added.

The department has been failing to enforce house rental tax despite frequent attempts. It had given an ultimatum of mid-October to all landlords to come under the tax net or face legal action but could not implement its decision. 

IRD’s plan to start house rental tax is not pragmatic because it will not be able to control under-invoicing of house rent at big commercial complexes, a source at the Finance Ministry said, adding that collecting taxes from a general house means adding a burden on the general public, who are compelled to rent rooms. 

All officials at the department are familiar with the trend of under reporting of the rent charge of big malls, supermarkets and commercial complexes in Kathmandu, the source claimed, adding that the ministry should first dare to control leakages from those big fraudsters instead of threatening small house owners and tenants. 

Similarly, Inland Revenue Department has also planned to conduct a market survey in all metropolitan and sub-metropolitan cities, and municipalities by the end of the current fiscal year, Nepal informed. 

The market survey will target persons and entities subject to be registered in income tax, excise, and VAT, he added. “Promotional and educational activities will be started to bring such non registrants into the tax net,” he said, adding that the move is aimed at widening the tax net.

National Tax Day

Inland Revenue Department will observe a tax week from November 17 to mark the 14th anniversary of the implementation of Value Added Tax (VAT) in the country, the department said. The cabinet has already decided to mark November 16 as National Tax Day, said deputy director at the department Bishnu Prasad Nepal, adding that the Tax Day will be followed by the Tax Week. Currently, the VAT regime has been facing problems due to under-invoicing and non issuance of invoices, he said. “Most of the problems will automatically be solved if consumers start taking bills from outlets and the Tax Week will focus on spreading awareness among the public.”

Source: THT