Monday, October 8, 2012

Government inefficiency hits private sector


Government inefficiency has hit the private sector, according to business community.
"Government inefficiency has fueled most of the problems," the district chambers' representatives from across the country blamed the Finance Ministry and Revenue Administration at a national workshop on 'Revenue administration and Current problems' here today.
The private sector lambasting the ministry for its inefficiency, red-tapism and terror it has created among the business community, also blamed the ministry for failing to walk its talk.
"Tax officials are not entrepreneur-friendly," they complained, adding that the tax administration had started 'Operation Black' in Makawanpur and 'Operation Swipe' in Bara to terrorise the business people.
The government is trying to control market by fixing Maximum Retail Price (MRP) that is not practical and has failed to create conducive environment for export-oriented industries, though it claims to boost the exports, they said.
A representative asked the ministry to also provide facilities to the business community that is the largest tax payer. "Instead of concentrating on revenue mobilisation only, the ministry should think of facilitating the private sector and creating conducive business environment too," they suggested, asking to resolve the slew of issues like VAT mismatch, increasing the VAT threshold and income tax ceiling, tax return, catagorisation of small businesses, minimising the misunderstanding between the tax officials and private sector, and up-gradation of road infrastructure at the customs.
Accepting the widening gap between the tax administration and business community, director general of the Inland Revenue Department (IRD) Tankamani Sharma, on the occasion, said that earlier mismatch will be resolved with the help of Federation of Nepalese Chambers of Commerce and Industry (FNCCI). "Let’s give a new start from today," he said, requesting the business community to issue VAT bills and keep all the records, according to the law of the land, from today.
The ministry has finalised the tax administration reform plans — the three-year reform plan and five-year strategic plan — to make the tax administration more business-friendly and increase the tax net instead of tax ceiling, he added. "It will be announced within a week."
Similarly, the department has also planned to celebrate Tax Day every year and honour the largest tax payer recognising the contribution made to the economy, Sharma said, adding that a High Level Tax Administration panel is also on cards to facilitate the system, apart from categorisation of the businesses that are under the VAT threshold of Rs 2 million, tax payer education programmes round the year and establishing tax offices in all the 75 districts.
"However, the department will keep vigil and monitor the market, if the business people are issuing VAT bills or not for the effective implementation of the new policies," he said asking the private sector to cooperate in the move.
The tax payers should be treated with dignity, vice-president of the FNCCI Bhawani Rana said, asking the government to fulfill its earlier promises to boost the confidence of the private sector.
"The ministry is ready to facilitate the private sector for the economic growth," said finance secretary Krishnahari Baskota.
SImilarly, caretaker finance minister Barshaman Pun also promised to co-operate the private sector and help boost their confidence.
 
Income tax ceiling to go up, tax compliance cost high
KATHMANDU: Finance Ministry has prepared to increase the income tax ceiling.
However, the delay in full-fledged budget has delayed the decision,” said finance secretary secretary Krishnahari Baskota. Currently, a fixed income of over Rs 160,000 of unmarried and Rs 200,000 of a married is out of the tax ceiling. “But with the increased inflation, the income tax ceiling also needs upward reveision,” he said, adding that the full-fledged budget will increase the ceiling. But he did not elaborated on the figures. Similarly, the business people of Bajura, Jajarkot and Rolpa have to spend almost ten times the cost of tax compliance. "The business people have to pay around Rs 10,000 to go to the tax office and get registered in Personal Account Number (PAN), which is a mere Rs 1,200 annually," the representatives of the Farwest Region said, complaining the government for being more concentrated on big-businesses' issues only. "We are neglected because we contribute only 20 per cent in the total revenue mobilization and geographically excluded too," they added.

No comments: