The Kathmandu Metropolitan City (KMC) has stepped up a gear in its tax collection drive, issuing notices to defaulters which have accrued millions of rupees in unpaid taxes over the years.

Such defaulters include banks, insurance companies, cooperatives and even some of the government entities, KMC chief Laxman Aryal said.

“They include most of the A class banks and top hotels in Kathmandu. Around 27 banks alone have defied paying house and land tax for a long time,” Aryal noted, warning that the KMC is considering taking stern action against them.

It’s not just the commercial houses, several government entities including Nepal Telecom and Sanchaya Kosh which own a number of properties in the Capital’s prime locations, are found to have defaulted with their property tax for years.

“It’s their duty to pay us the taxes. Among the banks only Nepal Rastra Bank is exempted from paying taxes to us,” explained Aryal

Under the decision made last month to collect house and land taxes from entities occupying an area of 10,000 sq feet in any of the 35 wards of Kathmandu, these government entities and corporate houses have come under KMC’s purview. Forty percent of the 1,535 houses blacklisted by the KMC were found to have been paying their taxes regularly.

The taxes in arrears largely include dues accrued from 2004 to 2010, totalling anywhere between Rs 1 billion and Rs 1.5 billion.

To encourage these tax payers, the metropolis had also cancelled the fines and deducted 10 percent of total amount, for those who paid the house and land taxes within mid-January.

The KMC is currently dispatching notices and bills to such entities and individuals through the respective wards authorities, adding 10 percent fines to their outstanding dues. Anyone defying the notice have face disruption of basic services including garbage collection and drinking water, the KMC said. “Everyone living in the metropolis should abide by the law and order. Otherwise, they don’t have the rights to access basic amenities” said Aryal. A house owner requires to pay around Rs 22,000 a year in taxes for a structure with an area of 10,000 sq feet.

During this campaign, the metropolis is also trying to collect other taxes, including rent and business taxes, from the houses who rent it out for commercial purposes. Shopping centres, malls, department stores and big bungalows that fall under this category require to pay two percent of the rent.

source: the kathmandu post,2 feb 2014