Revenue recovery drive: IRD to suspend bank accounts, businesses of tax defaulters

KATHMADU, JAN 16 -

The government has started to adopt harsh measures such as freezing bank accounts of tax evaders to recoup revenues. It has also warned of suspending businesses of tax defaulters.

The Inland Revenue Office (IRO)-1 of Kathmandu has already suspended bank accounts of three tax payers for failing to clear outstanding taxes, according to the Inland Revenue Department (IRD). “We may go to the extent of closing down their businesses,” said Tankamani Sharma, director general of IRD.

The department said it has been battling to recover taxes worth Rs 20 billion from several businesses for a long time. There are over 1,000 taxpayers who have not cleared taxes worth around Rs 1 million each. Income tax, value added tax, excise duty and tax deduction at source (TDS) are among the duties to be recovered from them. “Around half of these businesses have filed cases at the Revenue Tribunal. The IRD will begin action against those who neither have filed cases at the tribunal nor are interested in clearing tax liabilities,” said Sharma.

As per the Value Added Tax (VAT) Act, VAT and TDS for a particular month should be cleared within the 25th day of the following month. VAT is collected by businesses from their clients and submitted to the government through IROs, while TDS is collected by employers from their employees. “Collecting these taxes from clients/employees and not paying to the government is a crime and utter violation of the tax law,” said Sharma.

According to the department, the revenue recovery drive will aggressively be launched for a month from Jan 15, and after assessing its impact, it will be continued as per the need. “We have already informed negligent tax payers regarding the campaign. We also have published an open notice through the media,” said an IRD official. “If they still turn a deaf ear, we will suspend their bank accounts or businesses.”

According to Sharma, influential business firms, business persons, Kathmandu-based department stores and liquor industries, among others, are among those not clearing their due taxes.

Source: Kantipur