DANG, Sept 25: In a recent village council meeting, Gadawa Rural Municipality of Dang decided to impose tax on the export of sand and stones. As mining entrepreneurs already pay tax to the District Coordination Committee for the business, the rural municipality's decision is going to force them to pay taxes twice for the same thing.
Some of these entrepreneurs were not ready to be victims of double taxation. One entrepreneur Mukesh Kumar Gupta filed a writ petition at the Tulsipur-based high court against the decision of the rural municipality. In response, the court on August 17 issued an interim order instructing the rural municipality to withhold collecting the tax. Four days after the interim order, the high court gave a verdict in favor of the mining entrepreneurs.
Annex 8 of the constitution prohibits the local units from collecting tax from the export of resources. However, Rural Municipality Chairman Sahajram Yadav said he should have bypassed it by making a law in the local unit before collecting the tax.
However, Tulsipur Sub-metropolitan city is doing the same. It formulated a law and handed over a contract of Rs 102 million to Lumbini Kawad Center to collect taxes from natural resource extraction.
“We have to do lots of work for development. Our people have lots of expectations,” said Deputy Mayor Maya Acharya of the sub metropolis. “In order to meet their expectations, we have to collect tax from the extraction of natural resources, for which we have formulated an action plan.”
The sub metropolis has fixed tax rates on the export of everything. However, tax collection centers have been sometimes charging double the amount in export. While export tax collected by the sub metropolis is illegal, entrepreneurs are also forced to pay VAT on exports along with the regular tax.
After the problem of double taxation in Tulsipur was revealed, the provincial government circulated a notice instructing the local units not to make entrepreneurs pay taxes twice, according to Baijnath Chaudhary, spokesperson for the provincial government.