The government has backtracked from its earlier decision – within 24 hour – on payment of individual and business taxes and deferred the deadline to pay taxes and submit tax details by 15 days to June 21 after a huge pressure from the private sector and the main opposition Nepali Congress (NC).
According to the new notice by the Inland Revenue Department (IRD) published today, the deadline is extended keeping in mind the nationwide lockdown and risk of coronavirus transmission. The government has imposed the lockdown till June 14 – by extending it for the eighth time since March 24 – to contain the spread of coronavirus. And the department yesterday published a notice ordering businesses and individuals to clear their tax dues by June 7 as in the normal times. The department – in the notice – asked businesses and individuals to submit the second instalment of income tax of the current fiscal year by mid-June and value added tax (VAT) and excise duty till mid-March and mid- April, respectively, by June 7. “The failure to meet the deadline for filing tax returns and clearing tax dues of previous months will result in charges,” the notice read.
But the notice only infuriated private sector, citizens and main opposition party. The main opposition party Nepal Congress – issuing a press note signed by party president Sher Bahadur Deuba – has urged the people to gently disobey the government diktat to clear tax by June 7, as the country is still under lockdown since last 72 days bleeding the economy. Nepali Congress alleged that the government has been terrorising private businesses, labourers, and farmers with tax compliance instead of introducing a special relief package to them.
The businesses have remained shut for almost two-and-a-half months since March 24, and the movement has been curtailed by the government, which is forcing the people to pay tax by June 7 within lockdown period, said an angry entrepreneur. The lockdown has been imposed till June 14.
After the criticism from different sectors of the society, the department in its new notice today said that the deadline to submit tax details, income details and payment of taxes has been extended to June 21. The department has extended the deadline to pay value added tax, excise duty, tax deducted at source (TDS) under income tax, education service tax, telephone ownership fee, and telecommunication service fee to June 21 from the previous deadline of June 7, according to a notice issued today by the department.
According to the revised decision, businesses and individuals are now required to submit the second installment of income tax of the current fiscal year by June 29, the new notice reads, adding that VAT and excise duty need to be submitted by June 21.
This is the third time that the government has extended the deadline to pay taxes as the country continues to remain in lockdown to prevent the spread of Covid-19, which has claimed nine lives and infected over 2,300 people across the country till date.
The infuriated private sector representatives – including Federation of Nepalese Chambers of Commerce Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chambers of Commerce (NCC) – has criticised the government decision for exerting undue pressure on the private sector to clear taxes despite the continuation of lockdown.
The deadline extension followed a request from the private sector representatives to the finance secretary Shishir Kumar Dhungana during a meeting with Finance Ministry officials today morning. “The government decision to extend the deadline is a move towards a positive direction,” senior vice-president of the FNCCI Shekhar Golchha said, adding that the private sector has asked that the deadline be extended till the end of current fiscal year, until mid-July. “Most of the businesses are not in a position to pay taxes immediately as there is still a lack of cash flow due to the fact that the markets are closed.”
The VAT and excise duty are taxes that the business people have collected in the market but they have already been spent. “So, they need to raise cash from the market to pay the tax authority,” he added.
The government, on the other hand, is under pressure to mobilise revenue as the government coffer is almost empty, and from the beginning of the new fiscal year 2020-21, the government may not be able to pay salary to government staff due to huge deficit in revenue mobilisation because of its failure in collecting taxes.
According to the Finance Ministry, the government has only collected Rs 657 billion so far, against a target of Rs 967 billion by mid-June. “Though Dr Yuba Raj Khatiwada is the second lucky finance minister to present three budgets in a row – after 1990 – he has failed, for the second consecutive years, to mobilise the revenue and also spend budget,” sources at the Finance Ministry claimed that the stronger government – in the history of Nepal – led by KP Oli has failed to create business friendly environment and promoted ‘some businessmen’ for the benefit of the party. “The stable, stronger and powerful communist government is promoting crony-socialism rather than taking care of people, which has resulted in the revenue deficit since last two fiscal years after Khatiwada took charge of the Finance Ministry.”
According to the new notice by the Inland Revenue Department (IRD) published today, the deadline is extended keeping in mind the nationwide lockdown and risk of coronavirus transmission. The government has imposed the lockdown till June 14 – by extending it for the eighth time since March 24 – to contain the spread of coronavirus. And the department yesterday published a notice ordering businesses and individuals to clear their tax dues by June 7 as in the normal times. The department – in the notice – asked businesses and individuals to submit the second instalment of income tax of the current fiscal year by mid-June and value added tax (VAT) and excise duty till mid-March and mid- April, respectively, by June 7. “The failure to meet the deadline for filing tax returns and clearing tax dues of previous months will result in charges,” the notice read.
But the notice only infuriated private sector, citizens and main opposition party. The main opposition party Nepal Congress – issuing a press note signed by party president Sher Bahadur Deuba – has urged the people to gently disobey the government diktat to clear tax by June 7, as the country is still under lockdown since last 72 days bleeding the economy. Nepali Congress alleged that the government has been terrorising private businesses, labourers, and farmers with tax compliance instead of introducing a special relief package to them.
The businesses have remained shut for almost two-and-a-half months since March 24, and the movement has been curtailed by the government, which is forcing the people to pay tax by June 7 within lockdown period, said an angry entrepreneur. The lockdown has been imposed till June 14.
After the criticism from different sectors of the society, the department in its new notice today said that the deadline to submit tax details, income details and payment of taxes has been extended to June 21. The department has extended the deadline to pay value added tax, excise duty, tax deducted at source (TDS) under income tax, education service tax, telephone ownership fee, and telecommunication service fee to June 21 from the previous deadline of June 7, according to a notice issued today by the department.
According to the revised decision, businesses and individuals are now required to submit the second installment of income tax of the current fiscal year by June 29, the new notice reads, adding that VAT and excise duty need to be submitted by June 21.
This is the third time that the government has extended the deadline to pay taxes as the country continues to remain in lockdown to prevent the spread of Covid-19, which has claimed nine lives and infected over 2,300 people across the country till date.
The infuriated private sector representatives – including Federation of Nepalese Chambers of Commerce Industry (FNCCI), Confederation of Nepalese Industries (CNI), and Nepal Chambers of Commerce (NCC) – has criticised the government decision for exerting undue pressure on the private sector to clear taxes despite the continuation of lockdown.
The deadline extension followed a request from the private sector representatives to the finance secretary Shishir Kumar Dhungana during a meeting with Finance Ministry officials today morning. “The government decision to extend the deadline is a move towards a positive direction,” senior vice-president of the FNCCI Shekhar Golchha said, adding that the private sector has asked that the deadline be extended till the end of current fiscal year, until mid-July. “Most of the businesses are not in a position to pay taxes immediately as there is still a lack of cash flow due to the fact that the markets are closed.”
The VAT and excise duty are taxes that the business people have collected in the market but they have already been spent. “So, they need to raise cash from the market to pay the tax authority,” he added.
The government, on the other hand, is under pressure to mobilise revenue as the government coffer is almost empty, and from the beginning of the new fiscal year 2020-21, the government may not be able to pay salary to government staff due to huge deficit in revenue mobilisation because of its failure in collecting taxes.
According to the Finance Ministry, the government has only collected Rs 657 billion so far, against a target of Rs 967 billion by mid-June. “Though Dr Yuba Raj Khatiwada is the second lucky finance minister to present three budgets in a row – after 1990 – he has failed, for the second consecutive years, to mobilise the revenue and also spend budget,” sources at the Finance Ministry claimed that the stronger government – in the history of Nepal – led by KP Oli has failed to create business friendly environment and promoted ‘some businessmen’ for the benefit of the party. “The stable, stronger and powerful communist government is promoting crony-socialism rather than taking care of people, which has resulted in the revenue deficit since last two fiscal years after Khatiwada took charge of the Finance Ministry.”
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