Revenue Advisory Committee submits report to DPM Paudel, suggests expanding tax base

By A Staff Reporter,Kathmandu, May 16: The Revenue Advisory Committee has submitted its report to Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel.

Revenue Secretary at the Ministry of Finance Dinesh Kumar Ghimire, who is the coordinator of the committee, submitted the report to Deputy Prime Minister Paudel at a programme organised at the Ministry of Finance on Thursday.

The committee has suggested that all types of economic activities should be brought under the tax system and the tax base should be expanded.

Similarly, keeping digital transactions in view, it has suggested expanding the scope of electronic service tax, managing data received from international service providers, and classifying activities such as real estate transactions as commercial and making them taxable.

According to the report, the capital gains tax records should be made technology-friendly and transparent, and a system should be developed to maintain the interlink of taxpayer data and financial statements.

Stating that comprehensive reforms are needed in the customs regime, it has been recommended to ensure trade facilitation along with strengthening tax collection.

It has been suggested that the customs rates should be reviewed and policy adjustments made to protect domestic production.

The committee has suggested that globally recognised standards should be adopted in the valuation system, that digital systems should be introduced to make the customs process simpler, more transparent and information technology-friendly.

The committee said that non-tax sources should be identified, tax rates should be reviewed and institutional structures should be strengthened to diversify the government's income. 

The committee's report states that rates should be made realistic to mobilise these sources more effectively, and the collection system should be made transparent and digital.

The responsibility for revenue collection should be clarified, it said.

The report states that a clear policy and legal basis should be prepared to eliminate duplication seen in the distribution of revenue rights between the federal, provincial and local governments according to the federal structure. 

It has also been suggested that a mechanism should be established to forecast, set targets, implement, monitor and evaluate non-tax sources and that procedures should be developed so that they are appropriately reflected in the budget.

Receiving the report, Deputy Prime Minister Paudel said that the suggestions given by the committee will be important for the preparation of the upcoming budget.