Kathmandu Metropolitan City, Lalitpur Metropolitan City and Biratnagar Metropolitan City have reduced house rent tax 12 to 10 percent while Birgunj Metro has kept the old rate of 12 percent.

Officials say cutting the rate would encourage citizens to pay house rent tax.

This fiscal onwards, local governments receive house rent tax after the federal government handed over this responsibility on April 23. The centre’s decision ended a protracted row over jurisdiction claims on collecting this tax.

Earlier, the central government received 10 percent and local governments two percent out of 12 percent.

Kathmandu Metropolitan City (KMC) Information Officer Basanta Acharya said the tax rate was cut after stakeholders suggested 10 percent to encourage citizens.

Besides reducing tax, the KMC wants property owners and tenants to sign agreements.


“The Financial Act stipulates a landlord must report to the concerned KMC ward whether any tenant occupied apartment/rooms or vacated the rented house within 35 days,” he said.

The move would help the KMC to keep a record of tenants that is currently not available to the central and local governments. The KMC expects to collect Rs 2 billion in revenue with these measures.

Lalitpur Metro has reduced the tax rate for the same reason. Lalitpur Metro Mayor Chiribabu Maharjan said the reduced house rent tax would help increasing the number of taxpayers. “This has already helped to increase the number of taxpayers by around 6,500 within Lalitpur Metro in the current fiscal year, although I am not certain about total number taxpayers,” Maharjan told the Post.

Lalitpur Metro plans publicity and awareness campaigns to spread information on house rent tax with the objective of expanding its taxpayer base.

Biratnagar Metropolitan Office said it reduced house rent tax rate, but increased other taxes that had the same rates for the last four years.


“The Metro kept house rent tax low considering the hike in other taxes. This is also aimed at expanding base of taxpayers,” said Kumar Prasad Dahal, chief administrative officer at Biratngar Metro. Biratnagar aims to raise Rs60 million from the house rent taxes.

Birgunj Metro has not changed the rate, saying it does not have much scope to reduce the rate as it does not have other sources of income such  natural resources and tourism to rely on.

Birgunj Metropolis Mayor Vijay Sarawagi said they planned to enforce the existing tax rate on house rent tax as well. “We have asked the taxpayer to clear any dues within three months,” he told the Post.

source: the kathmandu post, 10 august 2018