Monday, December 19, 2005

Tax Laws is not enough for Checking Corruption: Experts

Kathmandu Dec 19-Many provisions in the two important laws relating to revenue collection in the country are supportive to promote corruption rather than control it.

Income Tax Act 2058 and Value Added Tax Act 2052 are considered as the country’s major revenue collection tools.

Within these laws, many clauses are either undefined or ambiguous wherein tax officers are provided with selective powers and work procedures are lengthy or tiresome, which only tend to promote corruption, said participants at an interaction program held in Kathmandu on Monday.

At the programme organized by Federation of Nepalese Chambers of Commerce and Industry (FNCCI), participants said the laws were not quite effective in terms of the clauses relating to accounting system, employment, services, donation and tax deduction provisions.

Participants said absence of transparency within the laws was painful for entrepreneurs, and this also negatively affects the revenue collection target of the government.

Chartered Accountant Sudarsan Raj Pandey and Senior Economist Puskar Raj Bajracharya presented separate working papers on the issue in the interaction.

Both paper presenters advised the need for alteration and transparency on Clauses 13, 16, 22, 23 and 24 of the VAT Act. Similarly in the Income tax Act, they advised modification in Clauses 2, 7, 10, 13, 25, 33, 67, 75, 76, 81, 82, 83, 89, 93, 100, 124 and 129.

Director General of Inland Tax Department, Ran Bahadur Shrestha, said, “The Department is ready to adopt advised suggestions after due study.”

He said the Department always welcomed the valuable suggestions derived from the taxpayers.

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