Suggestion to include all types of economic activities in the tax system and widen the tax base
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The Revenue Consultative Committee has submitted a report to Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel. Revenue Secretary Dinesh Kumar Ghimire, who is the coordinator of the committee, submitted the report to Finance Minister Paudel in a program held at the Ministry of Finance.
The committee suggested that all types of economic activities should be included in the tax system and the tax base should be expanded. Similarly, keeping in mind the digital transactions, it has been suggested to increase the scope of electronic service tax, to manage the data received from international service providers, and to make activities such as house-real estate transactions classified as commercial and taxable.
The committee is of the opinion that a system should be developed to make the records of capital gains tax technology-friendly and transparent, and to maintain the inter-relationship of taxpayer data and financial details. Likewise, it is recommended to ensure the strengthening of tax collection along with the facilitation of trade, noting that a comprehensive reform is needed in the customs system.
It has been suggested that policy adjustments should be made to protect domestic production by reviewing customs rates, globally recognized standards should be adopted in the evaluation system, customs procedures should be made simpler, transparent and information technology-friendly and digital systems should be used. The
committee has suggested that in order to diversify the government's income, identification of non-tax sources, rate review and institutional structure should be strengthened. In order to mobilize these resources more effectively, the committee has mentioned in the report that the rates should be made realistic, the collection system should be made transparent and digital and the responsibility of revenue collection should be clarified. In the
report, it is mentioned that a clear policy and legal basis should be prepared to eliminate the duplication seen in the distribution of revenue rights between the union, state and local governments according to the federal structure. It has also been suggested that a mechanism should be established for projection, target setting, implementation, monitoring and evaluation of non-tax resources and procedures should be made in such a way that the budget is properly reflected. While understanding the
report, Finance Minister Paudel said that the suggestions given by the committee will be important for the upcoming budget.
