Published On: July 16, 2020 09:13 PM NPT By: Republica | @RepublicaNepal
Online tax filing expected to reduce costs, hassles for nearly half a million small taxpayers
KATHMANDU, July 16: The government has introduced a new system for small taxpayers, allowing them to make electronic payment of their income tax for up to an annual income limit of Rs 200,000.
This new system is expected to benefit over half a million small taxpayers as it will reduce the hassle and lengthy process of visiting tax offices for tax returns.
With this new system rolled out by the Inland Revenue Department on Thursday, small taxpayers who have annual transactions of up to Rs 2 million and income tax of up to Rs 200,000 will be able to file their tax details and pay income taxes through mobile apps or other electronic mediums or directly to the designated bank branches.
The facility announced through the budget speech of the current fiscal year 2020/21 has been brought into implementation from the first day of the start of the new fiscal. The new fiscal year 2020/21 starts from today (Thursday).
This new system will end the requirement for small taxpayers to visit tax offices to fill up income tax related forms and manually complete the process of tax clearance. Now, taxpayers will be able make tax filing as well as tax payments through mobile apps or other electronic mediums.
The manual process was not only causing hassles for many taxpayers, but was also costlier for them.
Entrepreneurs have long been complaining that the costs associated with filing income details, paying taxes and getting tax clearance for some enterprises would exceed the amount that they pay in income tax. Some taxpayers outside Kathmandu had to travel a long distance to visit income tax offices and bank branches to complete the tax filing process.
Minister for Finance, Yuba Raj Khatiwada, said that the new system to use technology for tax filing as part of broader tax reform would address those concerns.
“Filling up long forms to submit income details, making payment after tax assessment and getting tax clearance was quite hassling for many taxpayers. This new system has made it convenient and easier for taxpayers to pay taxes and get a tax clearance certificate,” said Finance Minister Khatiwada, inaugurating the new system.
Those who cannot access technology will be able to submit their income details through designated banks and then pay taxes, according to IRD officials. This new system will reduce the human interaction of taxpayers with tax officials and thereby roles of tax officers.
Terming the implementation of the new system from the first day of the new fiscal year a first step toward the implementation of the budget, he vowed to achieve all milestones the government has set in the budget.
According to the IRD, it had received 411,000 income tax filings from small taxpayers in the last fiscal year 2019/20 that ended yesterday. Their contribution accounts for nearly one percent in the total income tax collection of the country.
A taxpayer registered at metropolis and sub-metropolis cities with transactions of up to Rs 2 million and income of up to Rs 200,000 per year has to pay Rs 7,500 in income tax. Such tax stands at Rs 4,000 for a taxpayer registered in municipality and Rs 2,500 in rural municipality.
However, the government has provided a 75 percent waiver on the income tax of the last fiscal year 2019/20 for these taxpayers hit by COVID-19.
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