A reliable source informed myrepublica.com that the Inland Revenue Department (IRD) recently issued a circular to the main Land Revenue Offices (LROs) to furnish it with details of all high-value transactions over the last four years.
Govinda Sapkota, chief of Bhaktapur LRO, said that all the LROs in Kathmandu Valley and adjoining municipalities and Village Development Committees have been asked to furnish details of large transactions soon.
"The government´s message is loud and clear: either legalize your fixed assets by paying 10 percent tax by mid-February, thereby benefiting from the Voluntary Disclosure of Income Sources (VDIS) scheme, or face the music later," he said. Sapkota further added that the step has been taken in a bid to bolster the effectiveness of VDIS, which has not received a serious response from tax defaulters so far.
Likewise, IRD has also sought details from the central bank about the promoters of banks and financial institutions in a bid to scrutinize their income sources. “We are in the process of investigating the income sources of promoters of banks, financial institutions and other service sector areas,” confirmed Deputy Director General of IRD, Navaraj Bhandari.
IRD has also communicated with the government agencies concerned to compile details about the owners of expensive vehicles, real estate dealers, manpower agents, doctors, lawyers and school and educational consultancy operators and keep them under close observation.
"Our latest move is aimed at generating a database on people and institutions in the revenue risk sectors where the chances of people not complying with tax requirements are high," said Bhandari.
This database, he said, will be used for weilding the tax axe against evaders and staunch defaulters who refuse to comply with tax regulations, once the VDIS scheme ends. "We will investigate transactions in the case of suspicious ones compel disclosure of sources of income," said Bhandari.
Officials at the Ministry of Finance (MoF) further said the latest move by the government was meant to make sure that those who amassed huge assets in the past but did not pay taxes due are not spared. "Evasion of tax is a crime against the state and the people at large. We wish to break the culture of impunity in this regard," said an MoF official.
IRD has said that it has identified 10 major sectors including real estate, manpower agency, health and education consultancy, commission agency, legal professionals and hundi (informal remittance agency) as prone to revenue risk. And the present IRD focus is towards forcing these sectors into the tax net.
"The choice is theirs. If they comply with VDIS, they will get away with paying 10 percent tax. If we have to force them to pay, they might end parting with as much as 50 percent of their income as tax and penalties," said Bhandari.
milan@myrepublica.com
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