Anirudra Neupane
Tax is the public’s compulsory contribution to the government. Normally, businesspersons are supposed to be the main contributors of tax. But this does not hold true in Nepal, where income tax contributes only about 20 percent of the government’s total tax revenue. Recent reports show that indirect tax contributes more than 70 percent of the total tax revenue (73 percent as per the midterm review report of Ministry of Finance). VAT is the largest contributor of indirect tax, followed by custom and excise duties. Indirect taxes are paid by the ultimate consumers, i.e. the people, and businesspersons are just facilitators. They collect taxes from people, i.e. the consumers, and pay the same to the government. But whether businesspersons are performing their duties correctly is questionable.
Tax is the public’s compulsory contribution to the government. Normally, businesspersons are supposed to be the main contributors of tax. But this does not hold true in Nepal, where income tax contributes only about 20 percent of the government’s total tax revenue. Recent reports show that indirect tax contributes more than 70 percent of the total tax revenue (73 percent as per the midterm review report of Ministry of Finance). VAT is the largest contributor of indirect tax, followed by custom and excise duties. Indirect taxes are paid by the ultimate consumers, i.e. the people, and businesspersons are just facilitators. They collect taxes from people, i.e. the consumers, and pay the same to the government. But whether businesspersons are performing their duties correctly is questionable.
