Contribution of the Information Technology (IT) industry to the state coffer has jumped by eight times over the past six years, according to the Inland Revenue Department (IRD).
According to the department, IT industry contributed Rs 15.1 billion to the state coffer in the fiscal year 2013-14, compared to Rs 2.3 billion six years ago in fiscal year 2009-10.
The IT industry contributed Rs 14.4 billion – including both VAT and non-VAT – in the first 10 months of Fiscal Year 2014-15. Contribution from IT sector is estimated to exceed Rs 16 billion in the fiscal year 2014-15, a growth of eight times in just six years.
Despite low registration of IT-based companies, according to the department, the contribution of the IT industry is very encouraging.
However, president of Computer Association of Nepal (CAN) Federation Binod Dhakal said that the government should encourage IT industries not only to increase revenue but also to create more jobs. "We can control exodus of IT professionals, if the government promotes IT sector, as there is enough space for youth in this sector," he added.
Similarly, president of F1Soft Biswas Dhakal said that the government should help IT industry grow so that it can contribute more to the state coffer. "Despite government's apathy, the IT industry is contributing large amount of money to the state coffer," he said, urging the government to allocate a special area for IT industries with uninterrupted power supply. "It will help make IT sector one of the largest sources of income generation, apart from employment generation," he said, adding that it will also help retain IT professionals in the country.
IT-related businesses have started being formal lately with due registration that has also expanded tax base though the volume of transactions is still very small. Four universities, more than 62 colleges, over 318 software and hardware companies, ISPs, cyber net, web-design, hosting and registration, IT enabled services, and networking services providers have joined the tax net, data shows.
But there are no customs records documenting the import and export of software statistics. As import and export of software is carried out electronically, these activities may be missed from the national accounts.
The World Bank Study on IT and IT-Enabled Services Industry in Nepal conducted in 2010 showed Nepal's software export was worth $10-15 million in 2007. The study also estimated that Nepal's export revenue should be about $1.1 billion, with the industry employing up to 40,000 professionals. The estimate is almost 100 times the formal revenue.
According to IRD, more than 83,400 IT-based companies are in the tax net but only around 4,000 have been paying regular taxes.
According to the department, IT industry contributed Rs 15.1 billion to the state coffer in the fiscal year 2013-14, compared to Rs 2.3 billion six years ago in fiscal year 2009-10.
The IT industry contributed Rs 14.4 billion – including both VAT and non-VAT – in the first 10 months of Fiscal Year 2014-15. Contribution from IT sector is estimated to exceed Rs 16 billion in the fiscal year 2014-15, a growth of eight times in just six years.
Despite low registration of IT-based companies, according to the department, the contribution of the IT industry is very encouraging.
However, president of Computer Association of Nepal (CAN) Federation Binod Dhakal said that the government should encourage IT industries not only to increase revenue but also to create more jobs. "We can control exodus of IT professionals, if the government promotes IT sector, as there is enough space for youth in this sector," he added.
Similarly, president of F1Soft Biswas Dhakal said that the government should help IT industry grow so that it can contribute more to the state coffer. "Despite government's apathy, the IT industry is contributing large amount of money to the state coffer," he said, urging the government to allocate a special area for IT industries with uninterrupted power supply. "It will help make IT sector one of the largest sources of income generation, apart from employment generation," he said, adding that it will also help retain IT professionals in the country.
IT-related businesses have started being formal lately with due registration that has also expanded tax base though the volume of transactions is still very small. Four universities, more than 62 colleges, over 318 software and hardware companies, ISPs, cyber net, web-design, hosting and registration, IT enabled services, and networking services providers have joined the tax net, data shows.
But there are no customs records documenting the import and export of software statistics. As import and export of software is carried out electronically, these activities may be missed from the national accounts.
The World Bank Study on IT and IT-Enabled Services Industry in Nepal conducted in 2010 showed Nepal's software export was worth $10-15 million in 2007. The study also estimated that Nepal's export revenue should be about $1.1 billion, with the industry employing up to 40,000 professionals. The estimate is almost 100 times the formal revenue.
According to IRD, more than 83,400 IT-based companies are in the tax net but only around 4,000 have been paying regular taxes.
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