Government Preparing Action Plans to Implement Tax Subsidy Programmes

  461 times read   3 min 50 sec to read
Government Preparing Action Plans to Implement Tax Subsidy Programmes

June 10: The government has started preparing action plans to implement the programmes of tax subsidies and exemptions announced for various businesses affected by COVID-19 pandemic. The action plans are being prepared to implement the programme presented in the budget for the upcoming fiscal year (FY 2021/22). 

According to the Ministry of Finance, the departments under the Ministry are currently formulating action plans to implement such programmes in a stipulated time. The Inland Revenue Department, the Department of Customs and other authorities under the Ministry are preparing separate action plans.

Mahesh Acharya, joint secretary of the Finance Ministry, said that the Ministry is working in full swing to formulate action plans and implement the programms in time. Acharya said that other ministries and departments have also started making action plans for the programmes included in the budget. Most of the action plans will be completed within this month.

Since the budget announcement, most of the customs duty rates have already been implemented while other concessional programmes and tax exemptions are in the process of implementation. The provision of income tax exemption will be implemented only after July 15.

According to Mukti Pandey, deputy director general of the Inland Revenue Department, said some concessional programmes including income tax will come into effect from July 15.

The budget has introduced provisions to give 90 percent income tax exemption to the taxpayers with an annual turnover of up to Rs 2 million, 75 percent to the taxpayers with turnover of Rs 2 million to Rs 5 million and 50 percent to those having turnover of Rs 5 million to Rs 10 million.

It has provisioned to apply only one percent tax on taxable income of hotels, trekking and travels agencies, transport companies, party palaces, airline companies, cinema halls and communication industry. 

If any person or company contributes to the fund set up by the government for control, prevention and treatment of COVID-19 pandemic, the amount can be deducted while calculating taxable income. The budget has reintroduced the policy of refunding value added tax (VAT) when the industry buys fuel. It has also provisioned to deduct VAT paid on the purchase of diesel and gas used in the taxable business of the taxpayer. These provisions will be implemented only after July 15.

The budget has given VAT, excise duty and customs duty exemption on various equipment and materials like oxygen, liquid oxygen, oxygen cylinder and medicines imported for the treatment of COVID- 19 infected patients until the mid of January 2022. This provision has already come into effect.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI), the Confederation of Nepalese Industries (CNI) and the Nepal Chamber of Commerce (NCC) have demanded not to fine entrepreneurs who fail to pay their tax during the time of restrictions. In a joint statement issued on June 10, it the representatives of the private organisations said it is not possible to pay VAT, excise duty required to be cleared on a monthly basis due to the restrictions on movement “so we urge the government not to impose fines on entrepreneurs”.

The three umbrella organizations of businessmen had sought to extend the time to clear taxes during last year as well but the government had not extended the time period. 

 

No comments yet. Be the first one to comment.