– Ram chandra Rupakheti
Advance country collects more than 40 percent of its total GDP. People feel very happy paying tax because of high degree of social welfare and effective utilization of public fund. However, a typical developing country collects 15 percent of its GDP in tax contribution. Very few people become happy in these developing and least developed countries. Simply, tax means an obligation of every citizenship of the nation on income.
It has many synonyms such as duty, levy, tariff, toll, excise, impost, contribution etc. It is the source of public expenditure. Indeed, paying tax is a burden, which we all must live with; however, it is also pertinent to take into consideration that taxes and other forms of indemnity imposed by the government which ultimately plays a crucial role toward the welfare of humanity. There are so many different types of taxes, but some of the common ones are value added tax (VAT), income tax, excise duty, custom duty, capital gain tax etc.
Our nation’s tax system is progressive system where each higher income holder is obliged to pay higher tax rate on income. Tax rates of income from employment starts from one percent to thirty six percent which are being levied. The registered companies pay income tax at the rate of 25 to 30 percent in Nepal. They are some examples of tax rates. In Nepal, bank and financial institutions, insurance companies, staffs working in many formal sectors, registered entities, government employee pay tax on their income properly. Implementation of tax laws in such entities are very fare and monitoring works can be easy too.
In Nepal, three tires of government prepare budget for the regular and development programs. Nowadays, it is found that the determination of tax base is becoming very difficult in every policy formation in these local, federal and central government. Some tax specialists are still telling that enough tax amounts have not been collected yet due to so many reasons. Very few research and development workshop have been conducted to form appropriate taxation policies. There are not enough technologies to locate the source of income and collection of tax amount. In some places, there are very difficulties to pay tax because of poor access of bank and financial institution. Private banks and financial institution are not given chances to collect taxes in these repot areas.
Further, we cannot say properly that black market is controlled effectively, by which, tax evasion widespread.The source of income is not identified yet due to poor electronic data collection system. Further, the tax boundaries are not widespread well till date. Still there are not enough administrative competencies, advance technology and technical know how for effective implementation of tax system. Almost, every local body suffers this system. There are always conflict between people and bureaucracy. The regular taxpayers may be getting trouble but people who pay late get discount and concession. However, some improvement like online system, tax verification, effective administrative process and tax clearance process can be found in tax offices.
Theoretically, there are various taxation policies which can be found practically applied in the world. According to the benefit principle of taxation, payers should get the benefits equal to their payment in terms of tax. The higher tax payer should get higher benefit provided by the state. They should get the enough facilities for paying higher tax amount. It is partially suggested that they are not getting the facilities and benefits provided by the state, they should be prioritized and given some respect, recognition and honorable life.
Therefore, the government needs to promote for the payment of tax. The general tax payers should be aware about tax system of the government. They should be well trained, educated and skilled for the same. Most of the tax payers are still confused to tax laws, facilities and mode of returns, technical ways. Another most important way of revenue collection is motivation strategy which may improve the collection of revenues. This include prize to well tax payers, discounts if earlier payment of tax, name announcement in mass media like television, radios, newspapers etc.
Many people have questioned why they need to pay taxes, while others just don’t care about what tax gives them in returns.Government should have certain strategies for the proper collection of the tax system. One of them is training and awareness to tax payers.The government should justify the tax revenue is a major tool of human welfare. Awareness programs should be conducted to give the message that taxes are the life source of a nation; we should be patriotic to this life source in order to keep the nation functioning.
Therefore, tax is essential to help the government give us protection, build better roads and bridges, institutions and provide social infrastructures. The government fund should effectively utilize. It should be concentrated on the expenditure reduction regular expenditure and prioritized on the development expenditure like in private sectors. Each expenditure should be justified because they are public revenue. All components of government should be concentrated to win the people’s faith. Anti-corruption strategy also supports tax collection by winning trust of tax payers. If the corruption is controlled, there will be effective collection of tax revenue because people can pay tax happily and enthusiastically.
Tax policy should motivate every entity to registration of every business. It should be focused on identification and protection of new business-like tootle, pathaos etc.They should be prioritized and motivated for their development. The government can conduct many programs to motivate tax payers. It consists of respect to the tax payers, timely issue of tax clearance certificate, timely decision on advance rulings, rebate, discount on timely payment of tax, tax education, token of love to good tax payers etc. There are strategies that can be suggested to government that good tax payers should be respected by listing their name in high tax payers, higher tax payer identity card, sigh, symbol, vip passport or red password, providing facilities in airport, restaurant, hospital, special honor so that they feel they are contributing the nation for human welfare.
There is another emerging concept of social security fund for the purpose of welfare of employee. It is suggested to collect huge fund through private sectors that there should be avoidance of tax on social security fund based on contribution.It means that any contribution in such fund should be deductible from the taxable amount. From economic point of view, social security fund can be a major sources of government fund for the construction and development of big projects. So, avoidance of dual taxation assists better public fund creation.
Therefore, a revision should be made on the tax laws to improve the sources of public fund. The need of finance is growing in Nepal because of economic, social and industrial development. Finally, government should make friendly environment of fund creation program so that people pay tax happily and excitedly.
