KATHMANDU: The 55th Annual Report released by the OAG has asked the government to act to recover the outstanding tax debts for the last four fiscal years. According to the OAG report, the government has yet to collect VAT on the commissions earned by 25 brokerage companies. There are 50 stockbrokers operating in the country.
Stockbrokers charge 0.35-0.6 percent as commission from investors. The government levies 13 percent VAT on the commission. However, the Finance Ministry has not come up with clear and concise instructions to stockbrokers stating that it has yet to finalise the modality.
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Last year, the Inland Revenue Office (IRO) wrote to three brokerage firms to clear their outstanding VAT for the last four years along with the penalty for late payment. The three firms, Sundhara Securities, Sewa Securities and Investment Management, were notified by the taxman last July to clear their tax debts from fiscal 2013-14.
Among the three, Sundhara Securities owes the taxman Rs6.3 million in VAT, Sewa Securities Rs11 million and Investment Management Rs11.7 million.
The IRO has not taken any further steps citing that the audit assessment reports of the rest of the brokerage firms are pending.
