The communist government seems keen on taxing Nepalis more to fund its model of welfare state. This fiscal’s budget had already increased taxes on luxury items, including alcohol and tobacco. Later internet and phone calls were also made dearer. In fact, increase in taxes on select goods and services has translated into higher market prices across the board. Nepalis are feeling the pinch.
It does not help that as the federal setup becomes operational the provincial and local level governments have started levying their own taxes. The federal government says many of these taxes are unconstitutional. Yet the provinces listen only selectively. All this has added to the perception that the federal system is costly for common folks.
Small businesses have to register under VAT and its higher tax slabs. Big companies and industries, most of which have been in a state of funk for most of the past three decades, are chaffing under ‘double taxation’.
But instead of increasing, tax collections have dropped, as people find all kinds of ways to evade taxes. They will continue to do so if they are not convinced that higher taxes also means better public services. They can see no functioning welfare state right now.
Fulll story on HERE...
