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| Kathmandu, Sunday November 16, 2003 Kartik 30, 2060. |
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Implementation of VAT not satisfactory
POST REPORT
KATHMANDU, Nov 15 - Various experts and policymakers said
that even after six years of the enforcement of Value Added Tax (VAT), its contribution
toward the country’s economy is not satisfactory.
Speaking at a seminar on VAT in Nepal organised here today by
Nepal Law Society in cooperation with Revenue Administration Support (RAS) Project DANIDA,
they said that commitment in both thought and action should be made from all the concerned
sectors to fully implement VAT.
Dr Ram Sharan Mahat, former Finance Minister, said that
business community as well as the society must change their mentality and be transparent
in order to implemented fully.
"It is a matter of great pleasure that today our society
has accepted VAT and it has been proved that VAT is being established and would stay in
the country," he said.
He stressed on the need to fully implement VAT in order to
save national industries from being deteriorated due to the availability of comparatively
cheaper foreign goods.
"While illegally imported goods, which are cheaper
compared to the legally brought in goods, are penetrating the local market, it is being
quite difficult to the national industries to maintain competitiveness with such
goods," he said.
Speaking on the occasion, Bhanu Prasad Acharya, Secretary at
the Ministry of Finance, said that VAT has still been unable to expand its sectors as
expected due partly to lack of transparent tax administration and tax system.
"With the enforcement of VAT, some problems such as its
billing system and complex process of duty drawback, have arisen. And the government is
gearing up to resolve such problems to make the implementation of the Vat efficient,"
he said.
Avanindra Kumar Shrestha, Director General of Inland Revenue
Department, said that contribution of VAT towards the nation’s Gross Domestic Product
(GDP) is three percent and the total collection of VAT during the last fiscal year was Rs
13.6 billion. "At present, around 30,000 businessmen and industrialists are yet to be
registered with VAT," he said.
Similarly, Lene Bendix, chief technician of DANIDA RAS
Project said that there is extremely low awareness of tax system among the citizens and
this has created hurdles in Nepal’s efforts to accomplish the desired result in tax
collection.
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