With this, the number of people coming under the tax net has expanded by 2,750, according to Bishnu Nepal, director at the Inland Revenue Department (IRD), who told myrepublica.com that the government’s revenue collection over the extended period for VDIS has crossed Rs 250 million.
However, the figure is far less than what the government had anticipated and the private sector had committed itself to while extending the program for a month.
The government had realized over Rs 1.04 billion in revenue from the scheme during its original duration ending on February 11. Some 2,000 people had taken part in the scheme and legalized Rs 10.40 billion worth of property after paying 10 percent tax to the government.
The private sector had said it would help the government double the collection if it extended the scheme by a month.
“The response on the second last day, nonetheless, was better than the previous days. We expect the collection to rise sharply on the final day, Friday,” said Nepal. On the second last day, IRD had continued tax counseling, sending SMS and making personal calls to taxpayers in a bid to get them to benefit from the scheme.
The government had announced VDIS in this year’s budget in October, 2008 to give an opportunity to people, who have amassed property without paying taxes due, to pay their taxes and legalize their property.
It promised not to seek the sources for income thus disclosed in a bid to induce people to come into the tax net. But to those who refuse to take advantage of the scheme, it has warned of tougher action like confiscation of property and fines and penalty of up to 100 percent.
Post-VDIS Action Program
In order to bring the axe down on tax evaders who refuse to comply with VDIS, the Ministry of Finance has directed IRD to start investigating the sources of property of individuals included in its list of potential tax evaders, starting from March 14.
IRD has prepared separate files of some 10,000 persons, identifying them as either operating in a grey market or not complying with the tax laws.
“We will first cross-check how many of those listed took advantage of the scheme and showed commitment to correcting their tax behavior in future,” said Krishna Hari Baskota, revenue secretary at the Ministry of Finance.
Once the list of people refusing to correct their tax behavior is generated, IRD will start raids and investigation of their property, he told myrepublica.com.
For the purpose, MoF is preparing to mobilize the central bank to unearth bank deposits, the land revenue offices to dig out holdings of land and buildings, transport offices to ascertain vehicle possessions and the company registrar´s office to investigate registered and undisclosed businesses.
“If the investigation finds a person possessing undisclosed and untaxed income, IRD will straightaway levy the tax and fines equal to 60 percent of the property,” said Baskota. In case they resist and refused to comply, IRD has been authorized to seize all the property.
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