The ministry however, fell short of revealing names of taxpayers who were involved in inflicting losses to the state coffer which could have been used to build over 131 km of road in the hills and double that length of road in the Tarai.[break]
“Tax laws do not allow us to reveal such information,” Finance Minister Barsha Man Pun told a press conference organized in Kathmandu. When pressed, he sidestepped the question saying: “I don´t have the names with me, as we decided to make the information public soon after completion of the investigation.”
The government via the Inland Revenue Department (IRD) had launched investigation into tax evasion in November 2010 coinciding it with the Tax Enforcement Campaigning Year 2011/12.
Since then, the department has investigated 227 trading houses, 83 contractors, 58 industries, 44 automobile traders, 37 hardware suppliers, 9 service-sector businesses, 4 department stores and 56 other enterprises.
“These firms were found to have evaded Rs 3.06 billion in VAT, Rs 3.32 billion in income tax and Rs 205.2 million in excise duty,” Pun said.
Of the amount, the government has recovered only Rs 115.5 million so far. The government has also received additional Rs 923.9 million from firms whose bail amounts were seized after losing cases filed against the government.
“Apart from over 60 firms that have sought review of IRD´s decision on tax evasion, others will be dealt with as per the provisions in Income Tax Act, VAT Act and Excise Duty Act, which among others, include freezing of assets and bank accounts,” Tanka Mani Sharma, director general of the IRD, told the press conference.
During investigations, the IRD had found malpractices such as issuance of fake VAT bills, submission of fake documents to get VAT refund, and establishment of companies in names of people not involved in the business to avoid government actions.
“Firms, like petrol pumps and construction material dealers, were also found involved in selling bills left by genuine customers to industries and contractors,” Sharma said, adding, “these problems surfaced as people started undermining the self-tax-valuation system that our country has”.
“This, however, shouldn´t mean the government no longer trusts taxpayers. We still have confidence in them but we have to beef up our surveillance…so that investors who try to make profit by stepping on the law or in an unhealthy manner cannot go scot free,” Pun said.
To check malpractices, the government has already made it mandatory for all firms to provide details of VAT bills within 25th day of every Nepali month. “We have also asked concerned government agencies to disqualify participation of firms found evading taxes from state-led bidding processes,” Sharma said.
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