Govt to integrate online tax system

KATHMANDU: The government has started to integrate the online system with an aim to exchange information about traders and transactions to bring in transparency in the tax system.

The Inland Revenue Department (IRD) has started to integrate the Central Billing Monitoring System (CBMS), Automated System for Customs Data (ASYCUDA) and Vehicle and Consignment Tracking System (VCTS) to exchange information about taxpayers and their trading.

IRD had implemented the CBMS from fiscal year 2018/019. Initially, the tax authority had integrated the trading of 35 large taxpayers in CBMS. At the end of the fiscal year 2019/20 trading of more than 100 large taxpayers has been integrated in CBMS.

The department aimed to trace the transactions of 200 large taxpayers through its online monitoring system. This system can track the whole billing system of those taxpayers who are registered in the system.

Similarly, the ASYCUDA system is being operated by the Department of Customs. Details of imported goods including purchase price and customs tariffs are registered in this system. Likewise, the Revenue Investigation Department operates the VCTS to track vehicles and consignments across the country.

“We have different systems to track trading but without integrating the systems information of traders cannot be shared properly,” said Binod Bahadur Kunwar, director general at IRD. The tax authority has set a target to integrate these three different online platforms to track importers and domestic traders within the current fiscal year.

“After integrating the three online systems, the tax authority will have the detailed information of imported or domestically transferred goods,” said Kunwar, adding, “This will help control the undervaluation of goods at the customs point and traders will not be able to sell goods at an expensive rate in the market.”

There is always disagreement between the concerned government officials and private sector regarding the cost of the imported goods and their price in the Nepali market. The government officials accuse the traders for overvaluing the goods to send more money in the international market and undervaluing the goods while making imports to pay lower revenue at the customs point.

“In the present situation the tax authorities cannot for sure know about the cost of the imported goods which are being sold in the domestic market due to lack of exact information,” a director at IRD said. “After the three systems are integrated we can cross-verify the price of the goods that has been declared at the customs point and the price that has been set in the market,” he added.

According to officials at the Ministry of Finance, the government plans to integrate the online systems to control the revenue leakage. “It is an open secret that traders are providing fake value added tax bills to consumers and committing fraud,” a high-level official at the ministry said, adding, “Integration of software and exchanging information is a good way to track trading and control the fraud that has been taking place since long.”