The Inland Revenue Department(IRD) is introducing a new billing system this week. The system will keep a track of all taxpayers with reference to every transaction they make for VAT.
The system is scheduled to be introduced on November 17 which is observed as National Tax Day. Using this system, IRD can easily trace all the transaction of the taxpayer and store all the VAT bill they charge to the customers.
The system is to be installed into the trader’s computerized billing system. Once the software has been installed, each VAT bill issued to the customer will be stored in the central server of the IRD under internet access. However, the software can also be operated offline and the data will be transferred to the server once the system is connected to the internet. A bill once entered cannot be manipulated by any means even working offline.
The IRD will have information about every transaction and it will be able to easily track whether the taxpayers have filed VAT or not., said Mr. Shishir Kumar Dhungana, revenue secretary at the ministry of finance.
According to the IRD, the initiation has been taken for the proper implementation of the revenue collection from the taxpayers as onsite inspection in the market is insufficient to ensure enforcement.
In spite of having a high number of taxpayer registered to pay VAT, due to lack of proper cross-checking mechanism, Revenue collection under VAT has been weak. As only around 16 to 17 percent of the taxpayers registered to file VAT file their VAT regularly, as per the department.
They believe that with the use of the technology they can aware the customer as well the taxpayers about paying tax. The software will be a help to IRD to trace the taxpayers who clear their stock charging VAT to consumers without paying any kind of VAT dues.