Govt mulling revenue administration reform

KATHMANDU, Nov 8: The government is planning to modernize revenue administration by making legal and structural reforms with the aim of boosting revenue collection, introducing scientific revenue investigation and creating tax payer-friendly environment.



The Ministry of Finance is developing a concept paper on addressing the problems facing the revenue sector by adopting measures practiced internationally, recruiting necessary human resources and amending existing revenue laws in the country. [break]



The country´s revenue system has outdated administrative structure and legal provisions, which do not support reform and boost revenue mobilization.



“It is high time for us to revamp the tax administration by amending the existing laws and administrative structure. So, we are developing a concept paper that will provide a guideline for addressing the problems in the revenue sector,” Tanka Mani Sharma, director general of the Inland Revenue Department (IRD) told Republica.

Sharma also said the concept paper will incorporate suggestions from various experts.



The government will form a High Level Tax System Review Commission that will recommend measures to address the problems in line with the concept paper.

Under the modernization plan, the government will restructure the tax administration, modernize revenue investigation system, and develop necessary human resources for effective revenue system. Due to lack of timely amendment of tax laws, the government has failed to expand tax net and boost revenue mobilization.



“We have not amended VAT laws for the last 15 years since its introduction in the country. Review of income tax law is overdue for the last one decade. Our revenue investigation system is still traditional though we have seen significant changes in the international tax system. The concept paper will attempt to address such problems,” said Sharma.

In the current budget, the government has announced to make revenue administration efficient through organizational restructuring, optimum use of information technology and enhancement of skills of the employees.



He said the concept paper envisages international standard revenue system compatible in the changed contest. The concept paper will also help the government make the revenue system friendlier to the tax payers.



Meanwhile, IRD has also formed two separate panels to recommend measures to be taken immediately to reform revenue mobilization system.

The current budget has also pledged to take measures to increase non-tax revenue to consolidate its contribution to inland revenue mobilization.

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