Ex-FM Pandey wrongly says only three percent Nepalis pay taxes

Sujit Mainali / July 5, 2016

Photo: Youtube grab

Former Finance Minister Surendra Pandey in an article titled “This is why Nepal couldn’t prosper” published in Naya Patrika on June 13 said the following:

“In Nepal, not more than three percent of the population pays taxes.”

South Asia Check has examined whether his claim is fact-based or not.

According to the Annual Report 2013/14 published by the Inland Revenue Department, 1,117,499 people of Nepal (which is about 4 percent of the total population of Nepal) are registered tax payers.

Therefore, Pandey’s claim is wrong.

And this does not mean that the remaining 96 percent people do not pay taxes.

Let us take the Value Added Tax (VAT) for example. Every person who consumes/purchases VAT-applicable goods or services pays this tax. But these taxpayers are not registered with the Inland Revenue Department (IRD).

Also, the government collects tax for every telephone set installed in the country. This tax is paid by the telephone subscribers.

Several taxes are levied on petroleum products in Nepal. Everyone who travels by public transport pays these taxes. These taxpayers are also not registered with the IRD.

Government collects five percent tax on the fees paid by expecting mothers for medical checkups to private hospitals. Mothers who visit private hospitals to have deliveries also pay five percent tax. This means a baby starts paying taxes even before he/she is born.

If an elderly with breathing difficulties dies on the ventilator, the hospital pays five percent tax to the government from the fees paid by the elderly’s kin. This means the government collects taxes from the womb to the tomb.

Besides this, the government collects indirect taxes like Agriculture Reform Tax, Infrastructure Tax, Road Construction and Maintenance Charge, House and Land Registration Fee, Film Development Fee, etc.

Click here to see the details of indirect taxes levied by the government:

Therefore, Pandey is wrong in saying that not more than three percent of the population in Nepal pays taxes.

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