The Inland Revenue Department (IRD) has started a full audit of 105 big firms, on suspicion of manipulating the filed tax amounts in relation to their financial turnover.
The IRD has started an investigation against these large taxpayers based on the financial reports as of mid-January that they submitted to the department. According to the IRD, it sent lists to the tax offices concerned to carry out re-examination of these large taxpayers based on their risk assessment.
CG Foods Nepal, Ncell Axiata Pvt Ltd, Siddhartha Bank Limited and NIC Asia Bank are among the firms that fall on the lists of review of the tax that they paid to the government in the first six months of the current fiscal year.
As per the law, taxpayers have been asked to pay taxes based on the self-declared amount of income. However, the tax authority can take them to a full audit, if the authority identifies any suspicion on the submitted financial report. The Income Tax Act 2002 has allowed the tax authority to re-examine the financial report until next four years, in case any flaws are detected on the tax filing.
According to officials of the Ministry of Finance, the IRD has started rechecking the report minutely also due to the pressure of revenue collection that falls short of the target this year. The ministry has aimed to collect revenue worth Rs 127.64 billion alone from the revised tax rates and tax administration reform.
The IRD has identified a total of 560 firms as large taxpayers. These firms are having transactions of over Rs 1 billion per annum.
Meanwhile, the IRD is set to start investigation of the financial report of medium taxpayers in the second stage. The department is said to have prepared the lists of suspicious taxpayers who fall under this category. A firm having annual turnover between Rs 50 million and Rs 1 billion is considered under the medium taxpayers.
