Private sectors urge the government to take flexible policy during lockdown

Published On: June 3, 2020 12:34 PM NPT

KATHMANDU, June 3: Private sectors have slammed the government’s zero tolerance measures for taxpayers even as business activities have come to a grinding halt due to prolonged lockdown enforced by the government to contain the spread of coronavirus (COVID-19).

Through a public notice on Tuesday, the Department of Inland Revenue (IRD) asked the business entities to clear the dues in value added tax, excise duty, income tax, education service charge and telephone service fee by Sunday. The department warned that any taxpayer failing to clear the taxes and fees within the stipulated date will have to face delay charges and cash penalty.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and Nepal Chamber of Commerce (NCC)-- umbrella organizations of private sector in Nepal-- have said it is inappropriate to ask private sectors to clear the tax dues by giving a few days of deadline.

NCC President Rajesh Kaji Shrestha said the government on one hand asked them to stay in isolation by extending lockdown, while on other hand it asked to clear tax dues strictly within the deadline. The FNCCI said it also wrote to the Ministry of Finance on Tuesday to review the recent IRD notice.

Business entrepreneurs complain that they have been unable to run businesses almost for the past three months due to the lockdown. They maintain that the prolonged lockdown severely affected their cash flows as they were unable to collect the receipts from the market.

Issuing a separate press statement, Nepal Foreign Trade Association has also urged the government to take flexible measures on tax collection.

Currently, the government is put under extreme pressure to meet even the recurrent expenditure due to poor revenue collection. The government has collected barely 56% of the total Rs 1.11 trillion targeted revenue for this fiscal year. In addition, the budget for next fiscal year has projected to spend Rs 948.94 billion in regular expenditure alone, while the set revenue collection is just Rs 889.62 billion.