KATHMANDU, March 26: Chairman of Tax Settlement Commission (TSC) LD Mahat has said that volume of unsettled taxes is piling up because of the government's failure to implement recommendations made by the previous commission.
Speaking at an interaction on "Jurisdiction of Tax Settlement Commission and Taxpayers' Responsibility" organized by Nepal Chamber of Commerce (NCC) on Tuesday, Mahat said only few recommendations made by the previous commissions were implemented. "Had those recommendations been duly implemented, taxation cases of this scale won't have come," he said.
TSC expects to settle about 3,000 cases of outstanding taxes by assessing applications filed by the concerned taxpayers. The government hopes to recover around Rs 40 billion in revenue by after those cases are settled.
Mahat was also the member of similar commission formed in 2006. The commission of 2006 had concluded that tax officials had slapped excessive tax on additional income found after self-declaration of income made by taxpayers. Similarly, the commission found that tax officials also did not accept disallowance of loss declared by taxpayers, among others. In its recommendations, the commission had asked the government to deal with the issue through legal and structural reforms.
The commission of 2006 had settled 2,535 cases and recovered additional tax worth Rs 2.51 billion and Rs 6.1 billion from disallowance of loss declared by taxpayers.
Tax-related issues of mismatch and fake VAT bill scam surfaced in 2008. However, the Mahat-led commission has not been allowed to look into such cases. The Terms of Reference (ToR) given to the commission says that it can settle cases related to different taxes and fees filed up to 2012/13 and cases determined by tax officials until 2013/14. Likewise, the commission can also look into cases subjudice in courts and agencies like Revenue Tribunal and settle them. Taxpayers, who have not made any appeal to government agencies for review, and those who are facing problem due to collection of taxes in wrong heading, can also apply at the commission.
Industrialists and businesspeople had long been demanding formation of the commission to settle taxes of sick industries and troubled firms whose outstanding dues is rising with every passing year. The settlement is expected to give them a tax clearance for starting new business.
In the interaction, businesspeople interacted with the commission's Chairman Mahat and member Umesh Dhakal on how they can apply for tax settlement.
Chudamani Sharma, Director General of the Inland Revenue Department, is also a member in the three-member commission formed as per the Tax Settlement Commission Act 1976.
The commission will accept application from taxpayers until the end of this fiscal year.
Related story
Report of Commission on Boundaries should be implemented by 2nd...
