Nepal for all seasons
December 08 , 2013
The Inland Revenue Department (IRD), in the initiation of the Trekking Agencies’ Association of Nepal (TAAN), organized a half-day interaction on tax and Value Added Tax (VAT) for trekking agencies in Kathmandu on December 8.
Proprietors, auditors and accountant chiefs of about 100 trekking agencies participated in the program.
Speaking on the occasion, Ram Mani Duwadi, deputy director general of IRD, said IRD has been organizing series of interaction to raise awareness among taxpayers on different issues related to tax and VAT. He said the department organized 1,000 similar trainings for more than 100,000 persons in the last fiscal year.
In his presentation, Jeet Bahadur KC, auditor of TAAN, highlighted the contribution of tourism sector in national economy and said the government should give preferential treatment to the tourism sector. He also highlighted problems being faced by TAAN member agencies while complying with the government’s tax rules.
Gopal Ghimire, director or IRD, made a power presentation on existing provisions related to tax and VAT. He covered issues like company registration, registration for income tax and Value Added Tax (VAT), tax accounting, foreign exchange accounting, earning, deductions, deduction on interest on bank loans, cost deduction, accounting maintenance cost and depreciation, depreciation deduction rate, headings where deduction cannot be applied, tax period, filing tax details, documents needed while filing tax details, provisions in VAT Act, accounting of transaction, provisions related to income tax and tax related provisions in the budget for fiscal year 2013/14.
Commenting on the presentation, Deepak Mahat, former president of TAAN, said trekking agents were facing difficulty in submitting details of expenditures made in rural areas where they don’t get tax invoice. “Hotels, lodges and home stay operators do not give us tax invoice. Hence, we are facing difficulties in showing our expenditures,” Mahat said, requesting IRD officials to resolve the issue. “Also, house owners ask us to pay rent tax. We are being forced to pay tax that property owners are supposed to pay to the government.”
Similarly, TAAN General Secretary Sagar Pandey said trekking agencies were being forced to pay more income tax as they can’t submit details of expenditures. “Service providers in rural areas do not provide us tax invoice. The IRD should tell us how we can show such expenditures while furnishing our details to tax offices,” he added.
On the occasion, Raj Kumar Thapa of A1 Excursion, Thakur Raj Pandey of First Environment Treks, Krishna Hari Khatri of Apsara Treks, Pradeep Karki of Ecological Treks and Rajendra Simkhada of Earthbound Expeditions, among others, raised queries on different issues related to tax and VAT. Most of the participants criticized the government for imposing higher VAT rate for tourism sector compared to other service sector.
Answering to queries raised from the floor, director Ghimire said IRD can do nothing about VAT threshold as the threshold is fixed by VAT Act. “If trekking agents do not get tax invoice for expenditures made in rural areas, they can include expenditure incurred in a paper. We will make necessary arrangements to recognize it,” he added. Terming the concerns raised by trekking agencies as genuine, Ghimire said he would forward the suggestions to concerned government authority.
Speaking on the occasion, TAAN President Ramesh Prasad Dhamala thanked IRD for organizing interaction on tax and VAT for trekking entrepreneurs. ”Trekking entrepreneurs have raised problems that they faced while filing tax details. I am hopeful that the concerned government authority will take them seriously,” he said, adding, “We don’t want to evade tax, we only want the government to simplify provisions related to tax.” Dhamala thanked officials of IRD for organizing such an important event for TAAN member agencies. “We could accommodate only around 100 member agencies for this training due to space and logistics constraint. TAAN will organize similar interaction for other member agencies in the near future,” he added.
Tanka Mani Sharma, director general of IRD, said existing rules and provisions related to tax and VAT need to fine-tuned as per the changed context. “We have collected valuable suggestions from the floor. As things can’t be changed overnight, we will forward the suggestions to the concerned authorities,” he added. He further said the department has the realized the need to simplify existing procedures related to tax and VAT.