Taxman to track sales at outlets in real timeThe Inland Revenue Department (IRD) has planned to put businesses on a tighter leash by requiring them to link their computerised billing system to its computers, enabling it to keep track of their transactions in real time.
The Inland Revenue Department (IRD) has planned to put businesses on a tighter leash by requiring them to link their computerised billing system to its computers, enabling it to keep track of their transactions in real time.
The central billing monitoring system, that will record sales instantly and allow the IRD to charge taxes accordingly, will be started on Friday at 600 sales outlets registered for value added tax (VAT) and are using a computerised billing system.
The department said the move was directed at checking growing instances of tax evasion by sellers. The computerised billing system installed at sales outlets will be connected to the IRD’s main server.
“The system is expected to help minimise cases of noncompliance,” said IRD Deputy Director General Yagya Prasad Dhungel. He added that the department would be implementing the central billing monitoring system from National Tax Day that falls on Friday. “In the first phase, we have targeted to include VAT paying firms that issue sales bills using a computerised system.” Currently, 600 business firms have received permission to issue computerised VAT bills, according to him.
After the rule goes into effect, business firms will need to install software that will connect their billing system to the IRD’s computers. Software developers licensed by the IRD will install a device and add a specific field in their computer systems. The IRD has issued permits to 140 software developers to provide the service.
In the second phase, the rule will be applied to sales outlets that issue handwritten VAT bills, Dhungel said. “Similarly, we have aimed to implement the system soon in the income tax segment.”
According to the IRD, a total of 1.6 million taxpayers are registered with the department. Among them, 184,000 are registered for VAT. It said 900,000 business firms fall below the VAT threshold while more than 600,000 individual taxpayers have received permanent account numbers.
IRD said the system was being implemented to prevent business firms from evading tax. During its inspection of 3,905 firms carried out from September-October, it booked 615 firms for not paying taxes. It also collected Rs3.84 million in fines
A majority of the businesses which were fined were found not issuing sales receipts to their customers or selling goods not stamped with excise duty stickers.
The department also found many stores using duplicate excise duty stickers, selling bootleg liquor or doing business without maintaining account books in a bid to evade tax.