The Revenue Advisory Committee has recommended the government to expand the tax base to include all types of economic activities and classify real estate transactions as commercial and taxable. Submitting its report to the Finance Ministry on Thursday, the committee also proposed extending the scope of electronic service taxes in light of increasing digital transactions, managing data from international service providers, and making capital gains tax records more transparent and technology-friendly.
The committee suggested integrating taxpayer-related data and financial statements, and developing a digital system to enhance the interconnection of such information.
In terms of customs reform, the committee emphasized the need to strengthen tax collection while facilitating trade. It proposed reviewing customs rates and adopting policy changes to protect domestic production. The report also called for the adoption of globally recognized valuation standards, simplifying the customs process, and making it more transparent and IT-friendly.
To diversify government revenue, the committee advised identifying new non-tax sources, reviewing rates, and strengthening institutional structures. It stressed the need to make rate-setting more realistic, implement a transparent and digital collection system, and clearly define responsibilities for revenue collection.
The report further highlighted the need to resolve overlaps in revenue rights among the federal, provincial, and local governments in accordance with the federal structure. It called for establishing a mechanism to forecast, set targets, implement, monitor, and evaluate non-tax revenues, and recommended integrating these procedures into the national budget.
Revenue Secretary Dinesh Kumar Ghimire, who also was appointed as the coordinator of the committee, submitted the report to Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel during a program organized at the Ministry of Finance amid a formal programme.
Finance Minister Poudel said the committee’s suggestions would be valuable for preparing the budget for the upcoming fiscal year. -- RSS
