Kathmandu, July 26
The rate of tax exemption has increased at the rate of average 34 per cent in past three years, says Office of the Auditor General.
The tax law allows the government to exempt various kinds taxes and revenues applicable on some basic goods and services at certain conditions. However, traders and government officials have been misusing the loophole to incur a loss of billions to the state, the Office has pointed out.
In three fiscal years from 2013/14 to 2015/16, the amount of tax exempted is Rs 138 billion and 590 million. The amount is ever increasing.
In 2013/14, tax worth Rs 38.27 billion was exempted whereas it was 49.01 billion the next year. Revenue worth Rs 51.31 billion was exempted in the fiscal year 2015/16, according to the 41st annual report (FY 2016/17) of the constitutional body.
The Public Accounts Committee in Parliament last year had directed the government to control tax exemption. However, the direction is apparently ignored, shows the report.
Meanwhile, it has been found the Ministry of Finance does not have a clear record of tax exemption.
