Govt to devise plan to expedite VAT evasion probe

The government is soon implementing four major programs under revenue mobilization, including formulation of work plan to intensify probe into pending cases of VAT evasion and identifying the sectors that are still out of tax net.

The programs are mainly targeted at controlling VAT evasion, widening the tax nets and accelerating the pace of revenue mobilization from sectors that are still out of tax net. 

The government has been looking into 495 cases of VAT evasion. So far it has recovered Rs 1.2 billion in revenue from 200 cases settled so far. The government has already completed probe into the 518 cases of VAT frauds and recovered around Rs 7 billion from the concerned firms that also include some big business houses.

VAT is the largest contributor to the state coffer. Out of total revenue collection worth Rs 234.45 billion during the first ten months of the current fiscal year, Rs 68.29 billion was raised through VAT.

“We have already directed the Inland Revenue Department (IRD) to devise a strategic plan for expediting probe into VAT evasion. Similarly, a study also be conducted to identify the sectors that are out of the tax net,” a high level source at the MoF told Republica.

The source further added that revenue administration will also focus on recovering outstanding revenue dues from the tax payers by launching awareness campaigns.

“As widening of tax net along is not sufficient to ensure more revenue collection, we are launching campaigns to recover outstanding revenue dues,” the source added.

Tanka Mani Sharma, director general of IRD, said launching of campaign to raise awareness among the tax payers about their responsibility to pay revenue to the state is also among the programs under revenue mobilization strategies. “Mainly the revenue education will focus in the capital where major chunk of tax is collected,” he added.

Recently, Lok Man Singh Karki, the newly appointed chief of the Center for Investigation of Abuse of Authority (CIAA), had directed the senior finance ministry officials to speed up investigation into the pending cases of revenue frauds and come up with a concrete plan to increase revenue.

“We will soon submit our plan on revenue investigation and mobilization to the MoF,” said Sharma.