The current tax system of Nepal, being overly complicated and lengthy, amounts to an annual loss of more than 24,300,000* hours of the taxpayers. This has resulted in an increase in the relative cost of paying taxes, as the time lost by the individuals could be invested into generating additional income. While the monetary payment that an individual or an organization has to make periodically is already burdensome for many, the requirement to comply with the administrative activities, imposes an additional burden. In such a scenario, it makes sense for firms and individuals to do away with this system, accounting for fewer taxpayers in the economy.
Introducing efficiency into the tax system would not only incentivize individuals to pay tax religiously, but also would allow NRs. 1,142,100,000* to be added to the economy, generating additional NRs. 57,105,000* tax revenue for the government. This makes the simplification of complex provisions that persists, beneficial to both the government and the taxpayers. Continue reading