Businessmen Hit Hard by ‘Tax Terror’

Government Giving Undue Pressure to Private Sector to Pay Taxes in Advance

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Businessmen Hit Hard by ‘Tax Terror’

September 29: At a time when the government’s revenue collection target is off the mark, authorizes are trying to meet the revenue target by hook or crook. They are making every possible attempts to stop revenue leakage and have also started calling businessmen in advance to pay their taxes.

On one hand, the government has failed to acquire grants from the donor agencies while it has not been able to collect revenue as per the target. In such a situation, the ministry itself has issued instructions to its subordinate bodies to stop revenue leakage and to collect taxes in advance.

The industrialists said that the government has been exerting them to pay the taxes in advance.

The target of the government is especially big and middle level tax payers.

Hari Gautam, senior vice-president of Birgunj chapter of the Federation of Nepalese Chambers of Commerce and Industries (FNCCI) said that 'tax terror’ has amplified in recent days.

“The industries are not operating in full capacity due to the recession. The income has dried up, while the tax authorities are calling us every day and asking us when we will pay the taxes. How are we going to pay the taxes in such situation?” said Gautam.

He complained that the state, which has set ambitious targets in the budget and does not pay any attention to reducing the current expenditure, is now collecting taxes by bullying the businessmen. As the state does not take effective steps to improve the stagnant economy, the existing industries are falling into more and more problems. He said that when the government took internal loans from the beginning of the current fiscal year to cover its expenses, a large amount of money going to industries and factories through the financial system was stopped.

Ashok Kumar Temani, president of Madhesh Province chapter of FNCCI said that the tax authorities are exerting pressure from all sides. He said that the government in the past used to discuss with businessmen before formulating ta policy. It stopped doing so after the onset of coronavirus pandemic, said Temani.

He complained that the government sets ambitious targets in the budget and then extorts money from the businessmen and industrialists.

“Because of this, the industrial sector on the verge of collapse. There is a danger of the country falling into a major economic crisis,” said Temani.

He believes that the problem has deepened in the country since the government started considering remittances as the main source of income rather than supporting the productive sector.

Kamlesh Kumar Agarwal, senior vice president of Nepal Chamber of Commerce, says that the effect of the global recession is seen in Nepal's economy. In this context, it is not fair to give undue pressure to the private sector because the government’s income has declined.

According to him, the current problem is not created by the private sector. Many industrialists and businessmen have fled due to the effects of the global recession. Agarwal said that the state should bring a policy to protect industry and business. It is not appropriate for the government to pressurize the private sector because its income is shrinking.”

The income of the government is not satisfactory due to internal and external reasons rather than the non-payment of taxes by the industrialists and traders. He complains that although the impact of the decline in global trade due to the Covid-19 pandemic and Russia-Ukraine tension is seen in the economy, the government has not paid attention to policy reforms.

In recent months, the government has failed to collect revenue as per its target. According to the Finance Comptroller General's Office, the government has collected Rs 154.23 billion as of mid-August this year. This is Rs 8.78 billion less than the revenue collected in the same period of last year.

This year, the government is yet to receive foreign grants. The government has set a target of collecting Rs 1422 billion in revenue this year.


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