1,522 tax evaders investigated

THE government has initiated yet another probe into value added tax (VAT) evasion by 1,522 taxpayers through the use of fake VAT bills. After the Inland Revenue Department (IRD) found the details submitted by a large number of taxpayers suspicious, it began the probe three weeks ago. IRD officials said after the details of tax, especially VAT, submitted by these taxpayers were found to be suspicious, the department decided to investigate the matter thoroughly. The government had announced recovering Rs 6.59 billion in unpaid taxes from 518 firms and companies after completing a one-and-a-half-year probe into the fake VAT bill scandal in 2012. Following the discovery of the largescale use of fake VAT bills, the department had subsequently probed similar incidents of tax embezzlement upon 216 taxpayers, the outcome of which has not been made public. “Our IT system has shown some incongruent and suspicious facts about these taxpayers,” said Rajendra Sharma, deputy director general at the IRD. He stated that all the revenue offices, including the Big Taxpayers Office, have been instructed to check the details submitted by these taxpayers who have been brought under the scanner, while the offices have begun to investigate the matter. Of the total suspected, more than 30 percent are big tax payers. Officials at the department said that if proved, this will be the largest tax embezzlement case in the country. “Economic activities in the country are growing and imports are soaring, however, VAT collection is still below expectations which is very alarming,” said an IRD official. “The probe this time will answer this question.” The IRD collected Rs 9.24 billion during the first month of the current fiscal year, 16 percent more than its collection during the same period in the previous fiscal year. Chudamani Devkota, IRD Director said if compared to the same period in the last fiscal year, the collection of income tax grew 38 percent, while the rental tax went up 30 percent. “But VAT collection grew by only 10 percent which is very nominal,” he said. He said that the suspected tax evaders were mostly from other districts outside the Kathmandu valley. According to the IRD, if tax evasion is established, the department will claim the unpaid amount along with interest while it may also freeze the bank accounts, transactions and import and export activities of the defaulters concerned. The Income Tax Act, VAT Act and Excise Act have provisioned such measures to recover evaded taxes.