Formulate Laws Regulate VDIS

The Inland Revenue Department has recently issued a notice appealing to the prospective taxpayers to declare their income and pay 10 per cent tax to the government by mid-January to legalise their income. The Voluntary Declaration of Income Scheme (VDIS) mainly targets the prospective taxpayers who have been evading tax. According to the Scheme, the tax authority won’t inquire into the source of income except in case it finds the income declaration unconvincing. The Scheme is good in principal as it can bring many taxpayers into the tax net. But we are little hopeful that this Scheme will be a success. The reason: the government does not have an Act to regulate the Scheme. Besides, we have little room to cheer about the efficiency of the tax authority. It’s often reported that some tax officials have a nexus with the taxpayers, who together dupe the nation. So we can expect little until the government formulates necessary laws and shows a strong commitment to check tax leakage.

Rajesh Subedi
New Baneshwor, Kathmandu