VAT bill probe will take more time
KATHMANDU, AUG 24 -
The much talked-about probe on fake Value Added Tax (VAT) bills will take some more time than expected to conclude.
The Inland Revenue Department (IRD) has said the investigations will not conclude within the stipulated time frame (mid-October) as the Large Taxpayers Office (LTO) that is investigating the most number of cases, will take more time.
Of the total 518 suspicious cases identified by the IRD, the LTO is investigating 152 cases. “Except for the LTO, other inland revenue offices will conclude the investigations on time,” said Rajan Khanal, the director general of the IRD. “As the LTO has a large number of cases and probing companies with higher transactions, the process will take some more time,” Khanals added.
Business organisations having an annual turnover of over Rs 250 million fall under the LTO’s purview. The LTO has completed investigations on 26 companies so far. According to Khanal, additional staff will be deputed at the LTO to expedite the probe. The Finance Ministry has already sent two officials on deputation to the LTO for the investigation process. The IRD started the probe on November 29, 2010 by forming a special team. It had found that the use of fake VAT receipts is rampant in businesses related to construction materials, automobiles and construction, besides corporate offices and even government offices.
It was found that evaders first presented counterfeit VAT bills, then showed inflated expenditure to reduce profitability, eventually hurting the government’s income tax collection. According to the IRD, investigations into 242 firms have completed till date and fines to the tune of Rs 2.9 billion have been slapped on them. Among the Inland Revenue Offices, only the Lalitpur Inland Revenue Office has completed investigations into all the cases it had been assigned.
The Biratnagar Inland Revenue Office is also on the course of wrapping up investigations. It has so far completed 19 of the 23 cases.
Finance Secretary Krishna Hari Banskota said the ministry is committed to keep up the pace of the probe as it has become an issue of public concern. “Our view is that the probe should be completed as early as possible,” Banskota said. “However, while trying to wrap things up early, the investigations must not be weak.”
With the Parliament’s Public Accounts Committee (PAC) also watching the probe closely, the IRD has been sending progress reports on the investigations to the PAC every fortnight. Banskota said the PAC is happy with the progress reports.
According to an official at the LTO, it takes almost 50 days to wrap up the investigation process that includes five stages. “If firms support the investigation, the probe can be completed in 50 days,” the official said. “But none of the firms have supported us whole heartedly.”
Oftentimes, the firms seek various excuses to delay the investigation. LTO chief Suresh Pradhan said the office is trying to make the investigations strong so that when firms file cases challenging the decisions, the government should not lose the cases.
“If we lose cases after firms go to courts, not only will we lose revenue, but the morale of the staff will also be hit,” Pradhan said.
Of the 242 cases in which investigations are complete, 26 firms have applied at the IRD’s administrative review committee for a review. “The committee has endorsed the decisions taken by tax officials,” Khanal said.
If the firms are not convinced with the committee’s decision, they can go to the Revenue Tribunal by depositing 50 percent of their penalty.
Source: Kantipur
The much talked-about probe on fake Value Added Tax (VAT) bills will take some more time than expected to conclude.
The Inland Revenue Department (IRD) has said the investigations will not conclude within the stipulated time frame (mid-October) as the Large Taxpayers Office (LTO) that is investigating the most number of cases, will take more time.
Of the total 518 suspicious cases identified by the IRD, the LTO is investigating 152 cases. “Except for the LTO, other inland revenue offices will conclude the investigations on time,” said Rajan Khanal, the director general of the IRD. “As the LTO has a large number of cases and probing companies with higher transactions, the process will take some more time,” Khanals added.
Business organisations having an annual turnover of over Rs 250 million fall under the LTO’s purview. The LTO has completed investigations on 26 companies so far. According to Khanal, additional staff will be deputed at the LTO to expedite the probe. The Finance Ministry has already sent two officials on deputation to the LTO for the investigation process. The IRD started the probe on November 29, 2010 by forming a special team. It had found that the use of fake VAT receipts is rampant in businesses related to construction materials, automobiles and construction, besides corporate offices and even government offices.
It was found that evaders first presented counterfeit VAT bills, then showed inflated expenditure to reduce profitability, eventually hurting the government’s income tax collection. According to the IRD, investigations into 242 firms have completed till date and fines to the tune of Rs 2.9 billion have been slapped on them. Among the Inland Revenue Offices, only the Lalitpur Inland Revenue Office has completed investigations into all the cases it had been assigned.
The Biratnagar Inland Revenue Office is also on the course of wrapping up investigations. It has so far completed 19 of the 23 cases.
Finance Secretary Krishna Hari Banskota said the ministry is committed to keep up the pace of the probe as it has become an issue of public concern. “Our view is that the probe should be completed as early as possible,” Banskota said. “However, while trying to wrap things up early, the investigations must not be weak.”
With the Parliament’s Public Accounts Committee (PAC) also watching the probe closely, the IRD has been sending progress reports on the investigations to the PAC every fortnight. Banskota said the PAC is happy with the progress reports.
According to an official at the LTO, it takes almost 50 days to wrap up the investigation process that includes five stages. “If firms support the investigation, the probe can be completed in 50 days,” the official said. “But none of the firms have supported us whole heartedly.”
Oftentimes, the firms seek various excuses to delay the investigation. LTO chief Suresh Pradhan said the office is trying to make the investigations strong so that when firms file cases challenging the decisions, the government should not lose the cases.
“If we lose cases after firms go to courts, not only will we lose revenue, but the morale of the staff will also be hit,” Pradhan said.
Of the 242 cases in which investigations are complete, 26 firms have applied at the IRD’s administrative review committee for a review. “The committee has endorsed the decisions taken by tax officials,” Khanal said.
If the firms are not convinced with the committee’s decision, they can go to the Revenue Tribunal by depositing 50 percent of their penalty.
Source: Kantipur
