KATHMANDU, Aug 16: The government has introduced a number of waivers, exemptions and reliefs on income tax, fines and interests accrued on tax liabilities for those taxpayers who have either not come under tax net or late on filing tax returns.
Issuing a public notice on Friday, the Inland Revenue Department said that it is offering relief to businesses and income earners on filing past returns to boost tax compliance.
The new notice will implement the announcements of such relief schemes announced by Minister for Finance Yuba Raj Khatiwada in his budget speech for the current fiscal year 2020/21.
These schemes will help late filers or earners who have not acquired even a permanent account number to save on penalty and interest payment.
If any individual, who earned taxable income and did not pay income tax, files income tax returns of previous fiscal year 2017/18 and 2018/19 and pays income tax by mid March 2021, all penalty and interests accrued on the dues will be waived off, according to the IRD’s notice.
The government will not only waive off penalty and interests of such late filers, but also exempt them from liabilities of filing tax returns as well as all taxes, penalty and interest payment of fiscal years before that time.
Similarly, natural persons acquiring PAN and annual transactions up to Rs 5 million will have to pay only 25 percent of penalty if filing for 2016/17, 2017/18 and 2018/19 is made and tax dues are settled by mid March 2021. Under this scheme, such taxpayers will be exempted from filing returns as well as paying taxes, penalty and interest dues before that period.
If any natural person and entity having PAN and annual transaction of over 5 million has not made filing return of 2016/17 or before that fiscal year, the taxpayer will have to file returns and pay income taxes and 25 percent of accrued interest to enjoy the waiver of all penalties and remaining interest.
Similarly, the IRD has also offered some waivers and reliefs to the VAT registrants. According to the IRD, those taxpayers who have registered themselves for VAT but have failed to submit VAT returns until mid July 2018 can file returns and VAT by mid March 2021 to enjoy waiver of all penalties, additional fees and 75 percent of accrued interest, according to the IRD.
These waivers will come as a relief for those late filers who want to settle their dues without paying penalty, additional fines and interest, according to private sector leaders.