What is Tax ?
Tax is a obligatory/compulsory charge and a failure to pay, along with evasion of or resistance to taxation is punishable by law.
* Collected from and Collected by
Tax is levied to finance the government activities
Different type of tax base on Charge
Direct Tax
A direct tax is one that the tax payer pays directly to the government. There taxes cannot be shifted to any other person or group eg. income tax, house taxes, property tax
Indirect Tax
An indirect tax is one that can be passed on or shifted to another person or group by the person or business that owes it. eg. vat, custom duty, excise duty
Types of tax on Based on pattern of tax rate
Progressive tax
The proportion of the tax increases when income increases resident natural, persons are taxed at progressive rate in Nepal from 0%, 10 %, 30 %, 36 %
Regressive tax
A tax imposed in a such a manner that the tax rate decreases as the amount to taxation increases, vehicle tax, business presumptive taxes are example of this category
Proportional tax or corporate tax
Whole taxable income is taxed at same rate in Nepal we have 20 %, 25 % and 30 % corporate tax rate in case of entity.
Overview of Tax acts in Nepal
Income tax Act 2058 ( income tax to individual and entity is levied and collected under this act
Value added tax, 2052 ( vat on goods and services in levied and collected under this act )
Excise act 2058 ( excise duty on manufacturing trading excisable goods is levied and collected under this act
Custom Act 2064 custom duty on import of goods is levied and collected under this act
The inland revenue department is currenlty responsible for this enforcement of tax laws and administration of income tax act, value added tax act, excise duty and duties like (entertainment fee)
Subject to amendment of finance act every year.
Department of customs is responsible for enforcement of customs act at the custom point
Who need to pay tax?
Mention under IT 2058 section 3
Person having taxable income during the year, remitting money to its parents company, amount after deduction in final withholding tax.
Vat 2052 under section 5
Customs act 2064 under section 5
Excise act 2058 under section 3
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