Monday, June 3, 2019

Advance VAT payment, one-third of SOEs in loss and more

From The Himalayan Times: The government has introduced a new provision which makes it mandatory for consumers who purchase goods and services from contractors and consulting firms to deposit half of the value-added tax amount in the state coffers themselves. As per the existing provision, if a consumer purchases goods or services worth Rs 10,000 from a contractor or consultancy firm, s/he must deposit half of the VAT amount — Rs 650 — at the tax office on his/her own and pay the contractor the remaining amount. Yagya Prasad Dhungel, information officer at the Inland Revenue Department, said the existing VAT guideline had been amended to this effect in a bid to end the trend among firms to hold on to the collected VAT amount.

The government has introduced such a provision also because contractors and consultancy service providers were increasingly found to be collecting VAT from service seekers, but were reluctant to deposit the collected amount in the state coffers.“Till now sellers had been collecting VAT from buyers and depositing the collected amount in the tax office themselves. However, with the new policy, both buyers and sellers will have to deposit 50 per cent of the VAT amount,” said Dhungel. He added that the new provision would make both suppliers and consumers responsible towards VAT payment to the government.

One-third of public enterprises post net loss despite heavy funding

From The Kathmandu Post: The dismal financial performance of the state-run enterprises continued in the last fiscal year with one-third of enterprises still reporting negative net income. Out of 39 public enterprises, only 26 earned profits in 2017-18. The government injected Rs164.42 billion in credit to these enterprises to run them, a rise by 0.67 percent as compared to previous fiscal year, according to the Annual Performance Review Report of Public Enterprises released by the Finance Ministry.

Similarly, the state equity investment in the public enterprises stood at Rs237 billion. The government, however, received Rs9.89 billion as dividend, up 27.28 percent as compared to previous year. When compared with huge capital injection for the public enterprises by the government, the dividend returns is just 4 percent. 

The performance of enterprises in the manufacturing sector, in particular, appeared pathetic as the state has not received any return from them in the last five years. These manufacturing businesses are—Dairy Development Corporation, Herbs Production and Processing Company, Hetauda Cement Industries, Janakpur Cigarette Factory, Nepal Drugs, Udayapur Cement Industries and Nepal Orind Magnesite. Instead, there was an increase in cumulative loss in five of these enterprises except Hetauda Cement and Udayapur Cement industries. The net profit of 26 enterprises rose by a mere 4.88 percent to Rs43.44 billion in the review period.

Route permits discarded for unregistered committees

From myRepublica: The Department of Transportation Management (DoTM) has canceled the route permits of all vehicles operated by transportation committees registered under Associations Registration Act 2034 BS. The government had given deadline till Saturday, June 1, for the transportation committees registered as associations to get registered as companies and to get listed in the department. The department has said that the route renewal, registration, and permit of transportation committees registered as associations instead of companies have been discarded.

According to Company Registrar's Office, 160 committees have been registered as companies. “We had given a deadline for registration till Saturday night,” said registrar of the office Bhuwan Hari Aryal. He said that the office was carrying out internal works on the registered companies. “Verification of the companies is going on, therefore, the number may increase or decrease,” he said. He said that as the entrepreneurs waited until the last hour, there was a huge crowd at the office.