Submitting the commission's report to Minister for Finance Minister Ram Sharan Mahat on Sunday, Rup Khadka, chairman of HLTSRC, said the government should fix a threshold and ask individuals to compulsorily make self-declaration of their assets.
The commission has recommended to the government to fix the threshold at Rs 50 million.
This means individuals having assets worth more than Rs 50 million has to compulsorily make self-declaration of their assets.It has suggested to the government to levy taxes on the basis of asset growth.
"If the government introduces provision for self-declaration of assets, it will lead to rise in revenue collection," added Khadka.
The government has not introduced provision for self-declaration of assets so far. At present individuals and firms are making make self-declaration of income only for the purpose of paying income tax.
The government had formed the commission to review tax system and give suggestions to the government for tax reforms.
The commission has also suggested to the government levy reconstruction tax of two percent on income tax and corporate tax for the next two fiscal years to meet reconstruction fun". "The government should also waive off taxes on income and corporate tax on contribution made by individuals, corporate houses and institutions to the reconstruction fund," added Khadka.
The commission has also suggested to the government to reform the income tax system so that it contributes at least one-third of total revenue generation. It has also suggested raising tax relief for savings for person funds, insurance, social responsibility and donations and gifts. Similarly, it has suggested to the government to provide tax relief of a maximum of Rs 300,000 on payment of interest and installments of home loans. However, such facility will be provided for first home.
The Khadka-led commission has also suggested to the government widen income tax brackets for individuals. It has asked the government to introduce same corporate tax rate for all firms and industries.
The commission has also suggested revising Value Added Tax (VAT) threshold to Rs 7 million from existing Rs 7 million.
Similarly, the commission has suggested to the government to remove social security tax on pension, stating that pension itself is a type of social security.
The government had formed the commission in November last year to review country's tax system.
Related story
All assets of organizations in the transport sector will come u...
