Over 200,000 Taxpayers Found Irregular in Payments at Kathmandu Metropolitan City

A startling revelation has emerged from the Kathmandu Metropolitan City (KMC), indicating that over 200,000 taxpayers are not consistently meeting their tax obligations, posing significant challenges to revenue collection efforts.

Out of the 312,000 taxpayers registered with the KMC, approximately 200,000 have been identified as irregular in their tax payments, according to the KMC Revenue Department.

KMC authorities have expressed concerns over the large number of taxpayers failing to fulfill their tax responsibilities. Among the defaulters, around 100,000 individuals are neglecting their rent-related taxes, while a similar number are avoiding payments for business tax, entertainment tax, and advertisement tax, stated Dhruv Kafle, Chief of the KMC Revenue Department.

To address this issue, the KMC is devising strategies to intensify monitoring at the ward level. The objective is to identify and engage with taxpayers who have been evading tax payments for an extended period, in adherence to established regulations.

Kafle emphasized the urgency of increasing tax compliance by bringing all categories of taxpayers into the fold of regular payments. He highlighted that the KMC is initiating proactive measures to monitor unregistered taxpayers, aiming to enhance overall tax revenue.

The accumulated arrears from registered taxpayers at the KMC amount to Rs 2 billion, lingering unpaid for the past 12 years, revealed KMC sources.

Despite setting an annual revenue target of Rs 10.80 billion for the current fiscal year, the KMC has faced challenges in meeting its objectives. As of the first eight months of the fiscal year, only Rs 5.80 billion has been collected, indicating a shortfall in revenue collection.

While the KMC’s revenue collection was initially deemed satisfactory in the early months of the fiscal year, a recent decline in revenue, particularly in the last month (mid-January to mid-February 2024), has raised concerns among authorities regarding the overall fiscal health of the metropolis.