Kathmandu Metropolitan City is preparing to seal off the the Thapathali based Trade Tower operated by Kanchanjunga Housing over tax default.

Kanchanjunga Housing has until Friday to clear the longstanding house and land taxes, a sum of over Rs 10 million, to keep the Trade Tower that houses around 40 entities including banks and colleges, whose fate is also tied to the move the housing firm will take or withheld in next three days. KMC has already closed down the firm’s office based inside the Trade Tower as a warning. 

Officials at KMC said that they have not heard from the people of Kanchanjunga Housing after they padlocked its office last week.

“We don’t expect this situation to arrive, but we will be forced to close down the entire building complex if the taxes are not paid on time,” said Mahesh Kafle, the chief of Revenue Department at the KMC. He added that the firm has not paid the taxes in three years. 

Representatives of Kanchanjunga Housing, however, claim that the firm is not entitled to pay the property tax as the Twin Tower was built on a land that was leased from the Nepal Food Corporation for 26 years.

“We have leased the land, but it is still owned by the food corporation. We would pay the property tax if we owned the property,” said Guru Prasad Neupane, the chairman Kanchanjunga Housing.  Neupane also said that the Ministry of Federal Affairs and Local Development has exempted the integrated tax to properties owned by the food corporation. 

Retaliating to Neupane’s claim, Kafle said that a clause on the lease contract between the food corporation and the housing firm reads that the latter will be responsible for all the taxes including the house and land tax, and that KMC’s practice does not exercise the integrated tax system.

Kafle said that KMC has taken action in accordance to House and Land Tax Act (1962), House and Land Tax Act (1963), Self Local Governance Act (1998), and Self Local Governance Regulation Act (1999).

Similar to the Trade Tower, many other entities including the United World Trade Center and Share Market are leased by Tribhuvan University and Guthi Sansthan, all of which have to pay property taxes to KMC.

“It’s a misconception that we have just targeted the Trade Tower, but in the coming days many more tax defaulters will be charged,” said Kafle.

KMC has dispatched final warning letters to many defaulters to clear its house and land taxes that have crossed over Rs 10 million.

Other prime properties being pressed by the KMC to clear dues include RB Complex, Karmachari Sanchaya Kosh and KL Tower, each of which has about Rs 1.5 million to pay in taxes. The Nepal Electricity Authority alone owes Rs 120 million.

source: the kathmandu post,16 april 2014