Economists suggest for restructuring of tax administration

Kathmandu, May 21: Economists have laid emphasis on the need of restructuring tax administration, improving public finance management and making value added tax (VAT) system further effective.     

In today's meeting of the Finance Committee under the House of Representatives, Economist Dr Dilli Raj Khanal expressed the view that there should be clear relations between economic policy and budget, adding restructuring of economy should be kept in priority.     

He stressed the need of forwarding structural reforms of economy and good governance simultaneously in the context of Nepal.     

Khanal argued that a long-term restructuring strategy should be prepared by identifying the primary sectors of economy.     

Similarly, another Economist Dirga Raj Mainali pointed out the need of extensive reforms in existing structure of tax administration.     

Sharing that there is structural problem in tax administration system since long, he suggested to restructuring was necessary to make tax administration system effective.     

Though efforts have been made for some improvement, extensive structural reforms is needed as it would take long time to give expected result, opined Mainali.     

Likewise, Economist Dr Rupak Khadka underlined that effectiveness of VAT depends on its structure and implementation, suggesting that it would be more beneficial for economy if VAT system is implemented at a single rate.     

Presenting New Zealand's GST system as the example, he mentioned that system with a broader tax base with limited exemption has been considered effective.     

He argued that a single rate system would be simpler, more transparent and administratively effective rather than multiple rates.     

The Economists suggested making economic management further strong by reforming public finance policy, tax administration and revenue system.(RSS)