As per IRD records, only 7 firms have cleared tax liability together worth Rs 61.9 million established against them. As many as 65 top business firms have moved the Revenue Tribunal. [break]
According to IRD officials, most of these firms belong to big corporate houses and were identified for evading tax in huge amounts.
"Tax liability of these 65 firms alone stands at Rs 2 billion," said a senior IRD official. As IRD investigation has so far slapped tax and fines of Rs 3.45 billion against 365 firms, firms challenging the IRD tax assessment together make for 60 percent of total revenue evaded under the fake VAT receipt scam.
These firms have moved the tribunal after IRD´s administrative review upheld the tax and fines that the investigation team slapped against them.
As their cases were already reviewed once by the higher authority, officials investigating the scam said they are confident of the tribunal upholding their assessments.
But they noted judicial course could delay the overall revenue recovery process, as the quasi-judicial body will follow its procedures and take its own sweet time before issuing a verdict. Officials said that the move taken by the big firms to move the tribunal has derailed the tax and fine recovery drive, as it has encouraged smaller firms to wait and watch the proceedings.
"Some of the firms that informed us that they will clear their liability soon have now backed out. They said if the tribunal really showed some leniency, they too could take that course," said the source.
Given the situation, officials said the pace of VAT and fine recovery, which is already slow, now depends on how fast the tribunal goes through the cases and gives its verdict.
Punish VAT evaders: FNCCI
Federation of Nepalese Chambers of Commerce and Industry (FNCCI) on Tuesday slammed firms that evaded VAT and tax, citing that they distorted the fair business environment and urged the government to take stern action against them.
"Business firms that collect VAT from the customers must transfer it to the national treasury. FNCCI does not tolerate such illegal activities in the private sector firms," said FNCCI in a press statement.
However, it also appealed to the government not to harass persons or firms that did not know VAT receipts issued to them were fake.
"There exists a clear difference between firms that issued fake receipts and firms that accepted the fake receipts unknowingly. The State must not treat them equally," FNCCI said. "But we would also like to stress that those found involved in scam must not enjoy impunity," it added.
FNCCI also noted that the scam has disclosed serious weaknesses in VAT regime and the involvement of government officials in perpetuating unlawful business practices.
It urged the government not to spare officials involved in the racket and also correct the existing weaknesses in VAT administration.
Related story
Tax disputes of over 30 firms settled by sidelining Revenue Tri...
_20240311121839.jpg)
