Govt adds 184k new taxpayers, short of target

- POST REPORT, Kathmandu
Govt adds 184k new taxpayers, short of target

Sep 20, 2014-

The government brought 183,785 new individuals and firms under the tax net last fiscal year, short of its target to add more than 200,000 new taxpayers in the year.

With the addition of these new tax payers, the number of taxpayers has reached 1.25 million, according to the official data. This means 4.72 percent of the population is now under the tax net, against the government’s target of increasing the figure of 5 percent. According to the Census 2011, the total population of the country is 26.49 million.

Over the last few years, there has been a phenomenal growth in the number of individuals and firms receiving permanent account number (PAN). Since the provision of providing PAN to individual was made in 2009-10, the number of registered taxpayers rose notably.

In the last fiscal year, the number of firms/individuals receiving commercial PAN increased by 82,762, while the number of those receiving personal PAN rose by 83,886, according to the Finance Ministry. The number of taxpayers under the value added tax (VAT) increased by 17,138.

The Inland Revenue Department (IRD) had targeted to distribute 100,000 PAN numbers to institutions and individuals each.

Finance Secretary Suman Sharma said although the targets were missed, the growth in taxpayers’ numbers is still impressive. “We could meet the revenue target even though we could not bring the desired number of taxpayers under the tax net,” he added. The government collected Rs 356.62 billion in revenue, against the target of Rs 354.5 billion last fiscal year.

In a bid to achieve the revenue target, IRD had taken several measures such as making it mandatory for business enterprise taking part in trades to acquire PAN numbers and to register under VAT.

IRD made it compulsory for professionals to submit tax clearance certificates before their professional certificates are renewed. The tax authority also launched a campaign to raise rental tax on June 23, 24 and 25. Besides, 28,552 taxpayers paid taxes under a scheme (Financial Act 2013-14) that offered concessions to different types of taxpayers such as those facing problems of mismatch in accounting.

Sharma said during the second constituent election, tax official were not able to continue their drive, which might have contributed to the failure in meeting the target. “I,

however, have to go through the details why we failed to meet the target,” he said.

The government has announced new measure to increase the number of taxpayers for this year through the budget. It states: “A mandatory provision will be made to obtain PAN for all public entities,

individuals and professionals who draw salary, remuneration, including services and benefits, from the public exchequer.”

Sharma said the government would adopt two strategies—education and enforcement—to increase the number of taxpayers and boost tax compliance. “We are preparing a new strategy to widen teh tax net and boost compliance,” he said.

Published: 21-09-2014 09:31

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