Taxman trains sights on foreign airlines

KATHMANDU, DEC 31 -

The Inland Revenue Department (IRD) has been discussing taxation in the aviation sector with stakeholders as the government itself has no clear idea about it.

The government is particularly concerned that international airlines operating in Nepal are not being taxed except on ground handling charges. “The existing Income Tax Act is not clear on the levies and ticket sales among other taxes in the airline industry. As a result, we are facing difficulties,” said Ganesh Pandey, chief of the Inland Revenue Office, Lazimpat.

Some airlines issue tickets directly through the internet to those who are travelling from Nepal, but they don’t pay tax despite earning an income from Nepal’s airspace.

According to government officials, the tax issue has become particularly pertinent to the international airlines connecting Nepal. Some carriers are in the government tax net

while others are not, they said. Therefore, the Inland Revenue Office 1 has invited stakeholders of the aviation sector for a discussion on Tuesday.

Pandey said that only some airlines were under the government tax net. The objective of the discussion is to settle the existing weakness in the taxation system and also problems being faced by carriers, said Pandey. “Necessary revisions will be made to tax enforcement after discussions,” he added.

Representatives of international carriers had been requesting the IRD to clearly define taxable income. The carriers have been raising concerns that they are paying VAT on the ground handling charge which is collected by Nepal Airlines Corporation.

In August, the Board of Airlines Representatives in Nepal (BARN) had met with IRD officials including director general Tanka Mani Sharma and requested them to waive the VAT imposed on ground handling charges as no other Saarc country and developed countries collect it. Currently, 27 international carriers are serving Kathmandu’s Tribhuvan International Airport.

Source: The Kathmandu Post