KATHMANDU, March 30: The government has announced to promote artificial intelligence (AI) based digital economy aiming to ensure more transparency, accountability and secured public finance management systems.
By endorsing the Good Governance Blueprint 2026, the newly formed government under Balendra Shah, has talked about enforcing a fully digitized system in various state mechanisms related to budget information system, integrated tax system, customs system and treasury management system.
A report submitted by a study panel formed under the Joint-secretary of the Ministry of Finance Than Prasad Pangyani, has also shown the possibility to transform the country’s economic administration by using AI and big data in budget formulation and revenue collection in the next five years.
Two-day Huawei Digital Nepal Conclave 2022
While the digital system has been sought to integrate various platforms in the budget mobilization system of the government, the integrated financial model has been recommended to develop a national data exchange platform for real time tracking of the public expenditure and public revenue.
The government has envisioned mandatorily linking the taxpayer's permanent account number with the national identity card to make tax administration more modern and dignified. Considering the fact that there are currently more than 5.4 million individual PAN and more than 2 million business PAN holders in Nepal, a faceless tax audit system will be implemented in the long term to conduct tax audits without physical presence.
In this process, risky taxpayers will be identified through AI, and the electronic invoice system will be directly linked to the system of the Internal Revenue Department, and arrangements will be made for automatic submission of tax deductions at source. This is expected to control revenue leakage and provide hassle-free service to taxpayers.
The use of cutting-edge technology has been made mandatory to solve problems such as smuggling and low tax collection in customs administration. X-ray scanners, radioactive detection monitors, and non-intrusive inspection systems will be installed at major border crossings in Nepal.
The report states that in the future, technology will be developed to automatically check X-ray reports by implementing a smart gate system. In addition, foreign trade will be made more transparent and technology-friendly by directly linking Nepal's customs system with India's customs clearance system.
A data warehouse will be built to formulate realistic and objective budgets based on big data analysis, replacing the traditional style of budget preparation, which will help in scientifically allocating budgets to priority projects.
