Hotel Association Nepal (HAN) has expressed concern over Kathmandu Metropolitan City (KMC) halting garbage collection from hotels claiming they have not paid property tax and said the move goes against existing laws.

Issuing a press release, HAN has said KMC is disregarding existing laws. It has clarified that Clause 12 of the House and Land Tax Act 2019 BS clearly states that ‘rooms accommodating guests, restaurants within its premises, vehicle parking and gardens of the hotels will be exempted from the tax’.

HAN has said that it is clear about the need to pay taxes levied upon it, as per the law. However, it claims that hotels are given certain exempt facilities for being an important part of tourism sector, which brings in considerable revenue and makes significant contribution to country’s economy.

HAN has said that since the House and Land Tax Act 2019 BS has not been annulled, its provisions are permissible going by the Nepal Laws (Interpretation Act) 2010 BS, which states that the existing rules shall prevail unless the law is amended or ratified.

While KMC officials claim that the hotels are liable to pay house and land tax as per Local Self Governance Act, 2055 BS, HAN argues that Clause 3 of House and Land Tax Act states that the latter will determine the land and house tax irrespective of whatever provisions exist in other Acts. In a bid to pressurise them into paying their dues, KMC stopped collecting garbage from hotels a week ago.

However, HAN has questioned rationale behind KMC’s claim that it has been given authority to levy taxes after Local Self Governance Act was implemented, since the orders were issued 14 years after it had been given the power to do so. “KMC has not been able to furnish satisfactory explanation for this,” says the release.

HAN has drawn attention to the fact that numerous international hotel chains have in recent years begun to invest in Nepal. And such incidents can hamper the possibilities of attracting foreign investment in the sector. KMC, on the other hand, claims they have asked hotels to pay taxes for house and land used for non-hotel purposes like office secretariat and lobby, among others.

source: the himalayan times,8 may 2014