Though the Ministry of Finance (MoF) pushed the department to complete investigations into all the 518 firms involved in racket by mid-February, officials said they could finalize the tax assessments for 502 firms only.[break]
Out of the sixteen firms against which investigations are still to complete include 14 large tax paying firms and one firm each in Hetauda and Janakpur. “Hopefully, Large Taxpayers Office and Inland Revenue Offices in Hetauda and Janakpur will complete their investigations soon,” said Finance Secretary Krishna Hari Baskota.
Under the VAT receipt racket, which was uncovered a year ago, IRD had found entrepreneurs either buying genuine VAT receipts from smaller firms or using printed receipts of some other registered traders (without their knowledge) to create fake transactions.
Through such practices, they had managed to show higher costs and thus cut tax liability. Worse still, acting on the basis of the fake VAT receipts and customs documents, some of the firms even claimed VAT refund, siphoning off funds from the national treasury without contributing a penny to it.
Furthermore, MoF has announced it mobilized Rs 128.50 billion in revenue over the first seven months of this fiscal year.
Though the collection is higher compared to same period last year by 20 percent, it is short of the target by Rs 2.50 billion. The government´s target was to collect revenue of Rs 131 billion by February 12, 2012.
“Shortfall was recorded mainly because collections from excise duty, vehicle registration fee and non-tax sources remained lower than what we anticipated,” said Baskota.
According to Baskota, the government mobilized just Rs 17 billion in excise duty, which is less than the target by 7 percent. Collections from non-tax sources also stood at mere Rs 18.50 billion, which is short of the target by 10 percent, mainly as public enterprises like Nepal Oil Corporation (NOC) and Nepal Electricity Authority (NEA) did not settle their tax liabilities.
Revenue collections from vehicles registration also remained just at Rs 4.25 billion, which is 25 percent less than what the government had anticipated to receive during the first seven months.
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