Stockbrokers and Taxpayer Service Office (TSO) seem set to lock horns again as the TSO, Tripureshwor has ordered three brokerage firms to pay value added tax (VAT) in share transactions.
On Sunday, the tax office sent letters to Sewa Securities, Sundhara Securities and Nepal Investment Management to settle their VAT dues of last four fiscal years — 2016-17, 2015-16, 2014-15 and 2013-14.
“As these three brokerage firms have not cleared their outstanding VAT amount on their commission, we have instructed them in writing to settle the tax within the next 15 days,” said Shishir Ghimire, chief of Taxpayer Service office, Tripureshwor.
Ghimire informed that, as per the provision of VAT Act 1995, the tax officer is authorised to assess the tax of last four years. If any firm has not settled their tax for more than four years, tax officers should then get permission from the director general of Inland Revenue Department before making assessment.
“As per tax law provision, we have written to brokerage firms to settle their taxes of last four years. I think other taxpayer service offices have also taken action on this issue,” Ghimire said.
However, he refused to disclose the tax amount that the three aforementioned firms are required to pay.
In the meantime, concerned groups have requested the government to roll back its earlier decision of collecting VAT from brokerage firms.
Issuing a press release, Stock Brokers’ Association of Nepal, Nepal Investors Forum, Nepal Capital Market Investors’ Association and Share Investors’ Association Nepal have requested the government not to initiate any action regarding VAT collection.
“There is a provision of tax exemption on financial services in the VAT Act. Thus, the government cannot start collecting taxes from brokerage firms,” they have argued in the press release.
Few months ago, the stockbrokers had halted trading in the stock market to protest against the tax offices regarding their decision of collecting VAT from brokerage firms.
Source: The Himalayan Times