Pokhara: Following its repeated failure to meet house rent tax target, Inland Revenue Office (IRO), Pokhara has started enquiring tenants in the lake city about the rent they are paying to their landlords.

The office has been failing to meet its target as land lords are undervaluing their house rental amount.

“We have started to talk directly with the tenants as landlords have been undervaluing the rental amount to evade or lessen tax. We are hopeful that this drive will help us know the exact rent that tenants pay to their landlords,” Laxman Bahadur Basnet, chief of IRO Pokhara, told Republica.

IRO Pokhara has set the target of collecting Rs 60.89 million in the current fiscal year. The office has collected Rs 40.21 million till mid-March.

“We have been failing to meet the targets for the past few years because landlords either do not pay house rent tax or undervalue the rent amount,” Basnet said, adding that the office would take strong steps to plug revenue leakage caused by such undervaluation.

As per the existing law, landlords -- owners of both residential and commercial buildings -- need to pay 10 percent house rent tax to the government. However, only those renting commercial buildings

However, only those who rent commercial buildings are found to have paid house rent tax. Those who rent residential buildings do not pay the tax at all.

source: republica,26 March 2013