Kathmandu, August 6: Ministry of Finance issued a press statement Thursday and said that it would fully and strictly implement value added tax (VAT) from the first of Nepali month Bhadra (August 17th) this year. The decision of fully implementation of VAT had been postponed for the last three years due to the opposition from the business community.
However, the government now wants to fully implement the value-added tax as it would not only increase government’s revenue but provide duty relaxation to businessmen as well, said the Finance Ministry statement.
There will be massive cuts in the customs and taxes to be collected in advance and administrative complications and hassles said the statement. Businessmen were reluctant to register in the VAT citing several administrative hassles and other problems.
The problems businessmen have pointed out will be solved, said Finance Ministry. Any applications or letters addressed to the Ministry and other bodies under the Ministry would be registered and taken into account without any prejudice and bureaucratic procedures with the objective of solving the problems currently existing in the business and trade sector.
Accounts certified by VAT office would be considered fully valid document for the purpose of income tax, tax payers, who have been or have not been registered in the VAT office, are allowed to declare their old stocks of goods by August 16th and such declarations can be made in terms of price also, only 0.5 per cent income tax will be imposed on differing prices of goods thus declared and this will be final, and bills, letter of credit or other documents will not be demanded.
Similarly, assessment of Vat paid by the tax payers will be made in every four year and tax clearance certificate will be provided, tax officers should provide their identity cards while examining the tax, exemption given in the sold bills will be validated in case of value being added and provisions concerning penalties stated in the VAT Act will be simplified.
Arrangements will be made for the waiving of tax for the goods which have been stolen, damaged and whose dates are expired, departmental stores using cash machine will be allowed to sell their goods by putting price tags along with VAT, the press statement of the Finance Ministry stated.
According to the Finance Ministry, those who have taken up the business other than cinema, cigarettes, distributor of alcoholic drinks, dealership, contracts, and tourism in the remote districts are not required to get registered for the purpose of value added tax.
A committee will be formed including private sector to solve local procedural problems concerning VAT and other taxes, transactions prices will be given validity while determining import prices for the purpose of customs evaluation and the customs officers will have to give reason if he or she is not ready to validate the transaction prices.
If any problems arise at the district level about accepting transaction prices, a review committee will be formed at he center to sort out them. For those who have already opened the letter of credit till the presentation of the budget for the Fiscal Year 1999/2000, evaluation will be made as per the existing laws, but in case of the LC’s being amended, the old evaluation system will cease to be effective, the Finance Ministry said.