Private-sector representatives and experts say the state should be flexible with businesses considering the impact of Covid-19 pandemic.
Soon after the Supreme Court on June 15 vacated its earlier order to stay the collection of value added tax (VAT) during the prohibitory order period, the Inland Revenue Department issued notice asking taxpayers to submit their tax details and pay the taxes by July 9.
As per the notice issued by the department on June 16, taxpayers have been asked to pay the VAT, tax deducted at source (TDS), excise duties, education service tax, telephone ownership and telecommunication service fees of Chiatra (mid-March to mid-April) and Baishakh (mid-April to mid-May) and submit their details by July 9.
At a time when the department has been struggling to meet its revenue collection target, the court’s order came as a welcome surprise for the Department. Earlier, on May 18, the apex court had issued an interim order not to collect VAT or impose fines on taxpayers during the period of the prohibitory orders.
“As the last month of the fiscal year always remains very important for tax collection and government expenditure, we issued a notice to taxpayers to pay taxes and submit the tax details,” said Arjun Dhakal, information officer at the department.
“Due to the prohibitory orders, taxpayers had not been able to submit tax details and pay taxes although their business transactions were good until the imposition of the lockdown in April-end.”
After the second wave of pandemic hit the country in early April causing huge loss of lives and overwhelming the country’s health system, the government authorities had enforced lockdowns separately in most parts of the country starting from late April. As a result, business activities were suspended creating a cash crunch for businesses. Until last week, only 50 percent of the businesses were in operation, according to the Federation of Nepalese Chambers of Commerce and Industry.
Lately, along with the gradual easing of lockdown restrictions, the tax authority found it opportune to ask businesses to pay the taxes. On Monday, the administrations of the three districts of the Kathmandu Valley announced further easing of lockdown restrictions by allowing private vehicles and taxis to operate on the basis of odd-even number rule and most shops to open on separate days.
