Officials won’t force taxpayers to clear their dues just yetThey are waiting for the final verdict from the Supreme Court on collection of taxes during the lockdown.
Tax officials say they don’t plan to force companies and firms that have not cleared their tax bills since the lockdown to pay up, even a month after the lockdown was officially lifted.
Taxpayers are not required to pay their dues immediately despite a June 11 order of the Supreme Court, which gives them at least 30 days after the lockdown is fully lifted to pay their taxes. The lockdown, which was enforced on March 24, was lifted on July 22.
“Despite the court order, most of the taxpayers are paying their taxes,” said Mukti Pandey, deputy director-general at the Department of Inland Revenue. “As per the law, they are self-assigning their tax liabilities and paying up.”
He said that given the encouraging voluntary payment of taxes, officials plan to wait for the final verdict of the court to decide whether they should fine taxpayers who don’t pay on time.
If it were not for this, tax authorities would be able to force taxpayers to pay their dues from next week, as the 30-days-after-lockdown period comes to an end.
According to the department, it collected Rs 33.70 billion as of August 13 for the current fiscal year 2020-21. The figures are encouraging considering the Covid-19 crisis which has forced many sectors of the economy to remain shut, officials said.
Revenue is being collected under all key headings—income tax, value added tax and excise duty, according to the department.
Despite officially lifting the lockdown on July 22, the government has started reimposing restrictions on business activities as Covid-19 cases have resurfaced along with an increased movement of people.
Pandey said that after the court’s final verdict, the tax authority would assess the payments made by taxpayers and settle overpayment or underpayment.
A senior official of the Ministry of Finance also said that the ministry had not yet thought about plans to take measures to force taxpayers to clear their dues as revenue collection has remained above expectation. “The tax authority is on track to meet its revenue target of the first month of the new fiscal year,” the official, who is not authorised to speak to the media, told the Post.
The official however could not confirm the target for the first month over the phone.
After the court’s order, the government reached out to the private sector to encourage it to pay taxes voluntarily, citing difficulties in running the government in the absence of tax revenue. The private sector also responded positively to the call.
“I had urged firms capable of paying taxes to pay up despite the Supreme Court order,” Shekhar Golchha, senior vice-president of Federation of Nepalese Chambers of Commerce and Industry told the Post early this week. “We should not forget our responsibility towards the state despite the court order.”
As the private sector responded to the call, the government also could meet its revised revenue collection target, which according to Golchha is also the matter of satisfaction for the private sector.