“We had targeted to complete the investigation by mid-October, but the investigation is still going on as we have to study huge number of documents and undergo lengthy investigation process,” Pun told the parliamentary Finance and Labor Relations Committee. “I´ve already instructed the concerned officers to complete investigation by mid-Feb.” [break]
Pun informed the meeting that Inland Revenue Department (IRD) has completed investigation against 413 of the total 518 cases under investigation. “We have slapped tax and penalty worth Rs 3.75 billion on the defaulters and mobilized total revenue amounting to Rs 91.7 million,” he added.
Of the 54 applications filed by tax payers for administrative review, IRD has given its final verdict on 26 cases. Most of the cases still to be finalized are associated with large tax payers.
When asked about timeframe for completing investigation on remaining 105 cases, Tanka Mani Sharma, director general of the IRD, said investigation on 49 cases would be completed by mid-Dec, 41 cases by mid-Jan and 15 cases by mid-Feb.
Acting finance secretary Rajan Khanal, who was leading investigation into the cases until recently, said VAT evasion, which is linked with under-invoicing of imported goods at customs points, has been encouraging informal economy.
“Ongoing investigation revealed that the fake bill racketeering would have triggered economic disaster if we had failed to track the cases in time,” added. He also complained that contradictory provisions in Income Tax Act, Right to Information Act and Compensation Act regarding the authority of investigation officials have created legal dilemma in dealing with the cases.
A case has recently been filed at the Supreme Court, challenging the government move to make public the name of taxpayers under investigation as directed by the Information Commission enforcing the Right to Information Act. However, existing Income Tax Act requires investigation officials not to disclose the information related to tax payers even to the finance minister.
Shanta Bahadur Shrestha, director general of Department of Revenue Investigation (DRI), said the joint investigation carried out by Nepal Police, DRI and Nepal Telecom revealed that 10 firms were found involved in unauthorized operation of Voice Over Internet Protocol (VoIP), causing loss of business worth about Rs 890 to telecom operators. Those firms used mobile recharge cards amounting to Rs 148 million, according to Shrestha.
Similarly, ongoing investigation against eight firms in connection to the misappropriation of Indian Currency (IC) has found that a total of IRs 853.7 million was withdrawn from Birgunj-based branch of nine commercial banks by producing fake demand drafts in the name of importing goods from India.
Speaking at the meeting, deputy director general of the Department of Customs Laxman Aryal informed that the department was making final preparation to introduce Maximum Retail Price (MRP) for a dozen products that have been under-invoiced at customs points.
“We have proposed to the finance ministry to fix MRP of products like TV, watch, juice, air conditioners, refrigerator, paints, bulbs, readymade garment and shoes to discourage under-invoicing at customs points,” said Aryal, who was also investigating the fake VAT billing scam until recently.
The government has already fixed MRP of automobiles.
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