Opinion
Phony assaults
News reports written without diligent fact-checking run the risk of misinforming the publicAnnaMaria Forgione
Earlier this month, The Himalayan Times published a news report titled “Popular Thamel Restaurant Pocketing VAT?”, explaining VAT procedures. While I was pleased at the article’s attempt at educating the public about VAT, I was equally surprised to see it suggest that Fire And Ice, a restaurant I am associated with, was involved in VAT irregularities. I was quite disheartened to see the article lacked thorough understanding of current practices and systems put in place by the government on matters pertaining to businesses, billing, and VAT.
As a longtime resident and business owner in Kathmandu, I consider paying taxes not merely a legal obligation but also a crucial contribution to Nepali society from the private sector. Having lived here for 30 years, I feel deeply connected to Nepal and I believe customers need to know about billing systems so they can hold business owners, such as myself, accountable. It is therefore important to know that the tax office has been implementing a new system of computerised billing to increase efficiency and transparency on all transactions.
As part of the monitoring system, businesses are required to submit monthly reports and annual audits. Only after following these protocols is it possible to get a certificate of tax clearance which then makes it possible for a business to exist under legal compliance. As the government of Nepal is updating systems, soon there will be a feature where as soon as a transaction has been made, the details of the bill will be uploaded onto an online system which will make it impossible to tamper with.
After understanding this system it is clear to see where there are advantages. For instance, under the old systems all orders were handwritten which meant there was a higher chance of billing mistake. Customers do not want to pay for items they have not ordered, and businesses should do their best to make sure there are no mistakes!
In order to ensure customers are billed correctly, businesses such as Fire And Ice are opting to offer a challan with a note that says “Please confirm the menu items served” so that customers can double check their order to make sure it is correct. Only after the billing information is confirmed are customers provided a proper bill.
The Himalayan Times news report mistook the challan as an irregular bill without “the name of the seller nor the seller’s tax registration number.” But if the challan had the seller’s name and tax registration number, there would be two bills. This, infact, would be an irregular and illegal practice.
While the report in The Himalayan Times was correct to quote Bishnu Prasad Nepal, Director General of the Inland Revenue Department, about increasing market monitoring, it failed to clarify what such monitoring looks like and what people should know about how to read and understand the bills they are being given. A challan is not a bill and should not be taken by the customer. Its function is to confirm the order and check the total amount. Customers should wait for the bill with all the necessary information to make sure the restaurant is charging the correct amount including VAT/service charge.
In attempting to call out malpractice that most likely does exist in the marketplace, it is crucial for more journalists and media houses to be better informed in their reporting and accurate in fact checking. While I received a call from The Himalayan Times, I was not informed regarding what news report would be published, or what the article was about.
I invited the reporter to come meet me at Fire And Ice, but he declined and made no further attempt to get a statement from me. Had I been given the opportunity, I could have explained the system and provided audits or financial records as evidence of how VAT has been paid and not pocketed as suggested.
Journalism is not merely about reporting, it is essential to report the right information. While fact checking and basing conclusions on proper findings is a must elsewhere, certain media houses here fail to do so. Articles and news reports written without proper investigation and diligent fact-checking run the risk of misinforming the public. This is not to say that VAT irregularities are not taking place in business establishments. But if you are careful enough to read the content bill, you’ll be able to discern if an establishment is following regulations or suspicious of irregularities.
The computerised system comes with a few features. Firstly, when a bill has been digitally inputted and printed, it cannot be edited or changed on the system. In fact, the tax office has come up with an online system where details of the bill will be uploaded as soon as the transaction has been made, making it impossible to tamper with the bills. Fire And Ice has already been utilising the computerised system for nine months and will comply with the online system when possible.
As a Kathmandu institution for nearly three decades, we consider it a responsibility for businesses like ours to serve their customers, treat staff well, and fully comply with government rules, including paying the VAT. Journalists and media houses reporting on current business practices could contribute better to society by being equally diligent with the information they disseminate.
AnnaMaria Forgione is the Director of Fire And Ice, Thamel.