Khatiwada says current tax system is more just

- Post Report, Kathmandu

Aug 18, 2018-

In the face of mounting public criticism of the tax system, the Ministry of Finance said on Friday that the current system was more just as it did not impose excess burden on the general public.

The government has revised the tax rate besides expanding the tax base extensively through the budget for this fiscal year.

Although the government has been saying that exemptions would be given to low income people, and taxes on luxury goods would be increased and high income earners would be brought under the tax bracket, a bunch of new taxes announced by federal, provincial and local governments have caused a public uproar.

Speaking at an interaction organised by the ministry on Friday, Finance Minister Yuba Raj Khatiwada said the new tax system only focused on extending the tax base which had not been revised for more than a decade.

“The government has not raised the tax rate on essential goods in a bid to provide relief to low income groups,” Khatiwada said.

Khatiwada acknowledged that the government’s newly introduced integrated tax on fixed assets had created an extra tax burden to some extent. “The main purpose of the new system is to enforce a progressive tax system in all sectors,” he added.  

Finance Secretary Rajan Khanal said, “The ministry feels that some of the taxes might have created confusion among the general public as they were launched without proper homework.”

Besides increased taxes, another fear spreading among the traders’ community is the possibility of double taxation with all three three tiers of government going on a taxing spree.

Showing concern over possible double taxation of goods, the parliamentary Finance Committee on Tuesday directed the government to resolve the issue of double and unnatural taxation.

“Imposing taxes beyond the people’s capacity to pay and taxation of the same financial activities by different tiers of government is against the principle of taxation,” the Finance Committee stated in its conclusion note.

The Finance Ministry said that it was working to impose taxes on goods and services at a single transaction point to eliminate the possibility of double taxation.

As per the ministry, it has formed a taskforce led by the joint secretary and including representatives of the private sector to address the issue of double taxation.

Published: 18-08-2018 08:36

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