Bishal Bazar cleared all its outstanding rent tax since 2000, said Mahesh Kafle, chief of Revenue Department at KMC. “Although Bishal Bazar was paying the house and land taxes regularly, it had not paid the rent tax.”

All the businesses are required to pay two percent of their yearly rent income to KMC apart from  the house and land taxes of Rs 4 million per annum.

KMC officials said that the tax defaulters have shown seriousness to clear the taxes after it began the tax recovery campaign. As a result, many companies have either partially cleared their taxes or at least communicated with the metropolis. Under its tax recovery campaign, KMC has introduced the provision of installment payment scheme for tax payers, if they agree to make a payment of above Rs 1 million at a time.

In the past two months, KMC has managed to track and warn many government and private entities defying rent, house and land taxes for years. Some of them had ran up Rs 120 million in unpaid tax. Earlier this week, Bhatbhateni supermarket also cleared Rs 4 million of its Rs 20 million pending tax amount.

Meanwhile, some of the companies like Kanchanjunga Housing, RB Complex, Karmachari Sanchaya Kosh and KL Tower are yet to clear their taxes. KMC officials said each has around Rs 1.5 million to pay in tax, and that

they have expressed their commitment to clear their dues soon.

 Some of these taxes have been pending as these properties are leased out to Guthi Sansthan and Nepal Food Corporation, making it unclear whether the owner or the tenant should pay the tax.

With Rs 120 million in outstanding tax, Nepal Electricity Authority has the highest amount to pay KMC.

To intensify tax collection, KMC in January had directed house and land owners to ensure that they clear their taxes within the second week of the month.

The metropolis had blacklisted 1,535 houses who defied house and land tax rules for years. Most of them were the operators of commercial complexes having an area of 10,000 square feet in all the 35 wards of Kathmandu.

It had also planned to fine 10 percent to the pending amount upon failure to clear the dues by mid-January. Three weeks back the metropolis had dispatched a final warning letter to the defaulters warning to relieve them from basic facilities and even auction off their properties if they fail to pay promptly.

According to Local- Self Governance Act 1999, the metropolis is entitled to padlock, freeze and auction off the properties of the defaulting parties to recover its taxes. KMC also has plans for an extension on the dates to pay these taxes either by the end of this fiscal year, or even push the deadline to the next fiscal.

Around 90 big institutions have asked for an extension but the KMC has specified no other deadline for the payments yet. KMC aims to recover at least Rs 1 billion from the campaign.