Develop detail digital profile of all taxpayers: MoF instructs IRD
KATHMANDU, Aug 2: Ministry of Finance (MoF) has instructed Inland Revenue Department (IRD) to develop digital profile of all taxpayers, incorporating their personal, professional and income details, and also carry out survey on rental tax in a bid to generate basic information for tightening knots against revenue evaders.
Under the digital profile, the Ministry has instructed the IRD to expedite its campaign of permanent account number (PAN), whose registration has already made mandatory for all income earners, irrespective of whether or not they need to pay tax.
Likewise, the Ministry has asked the department to mobilize its offices and taxpayers´ service centers to survey out presence of houses and other buildings in their areas, identify whether those are residential, semi-residential and commercial buildings, and whether owners have registered with the tax office and paying rental tax.
“Unless we have clear digital profile and survey we will not have basic details needed to expedite our vigilance and check revenue evasion,” said Finance Secretary Krishna Hari Baskota.
He informed Republica that the Ministry has already instructed the revenue administrators to incorporate the programs in their respective annual plan and devise strategies to implement them. The MoF has suggested them to update existing guidelines on PAN and rental tax if required to generate these basic information.
Officials said development of detailed digital profile of taxpayers was crucial to identify groups vulnerable to tax compliance. Similarly, rental tax is regarded as one of the least complied component.
“Going by our international commitments, we cannot rely on raising tax rates, but will need to widen tax base if we are to continue reaping growth in revenue collections,” said Baskota. “Hence, these steps are crucial for it will lead to widening of tax net.”
Addressing the senior revenue officials at a function on Wednesday, Baskota expressed concern over low revenue-GDP (gross domestic product) ratio which presently stands at 15.5 percent.
“We must raise it to 20 percent over the next few years if we are to maintain our capacity to smoothly execute service delivery and development priorities,” said he laying emphasis on the need to step up reforms and enhance tax enforcement.
Newly appointed acting Chief Secretary Lila Mani Paudyal expressed satisfaction over the latest rise in revenue collections. But he expressed concern over under invoicing that runs deep in import trade, local commodity trade and property transactions, among others.
“Under invoicing has always remained as one big challenge to the revenue administration. It must work collectively and devise ways to tackle it efficiently,” he stated.
At the program, Paudyal handed over award to Inland Revenue Office (IRO), Lalitpur, for delivering the best output among all IROs. IRO Biratnagar and Bharatpur too were felicitated for being second and third best. Likewise, Taxpayers´ Service Center (TSC) at Tripureswor won the outstanding performance award among all TSCs.