DRI to tighten vigil on tobacco firms

HIMALAYAN NEWS SERVICE

KATHMANDU: The Department of Revenue Investigation (DRI)’s plans to tighten its vigil on various tobacco factories and tobacco transactions failed to gather momentum despite its pledge to bring tobacco business under the tax net.

The department had officially vowed to bring all tobacco factories, which it had suspected of being involved in tax evasion, under the tax net. However, the process could not pick up pace due to the replacement of the department chief and low efficiency of flying squads, an official at the department said.

“Various tobacco factories are evading tax compliance by under-invoicing their products,” said deputy director general of DRI Rajendra Sharma Laudari, adding that the department will do its best to curb such trends.

DRI has received complaints that tobacco factories, especially in the western plains and eastern part of the country, are evading tax compliance by concealing their transaction details, he added.

The department had raided Butwal-based Sona and Swaha tobacco firms in March following tip-offs that they were evading taxes. It will continue to put the warehouses of tobacco industries under its scanner to control revenue fraud, informed Laudari.

Meanwhile, the District Government Attorney Office will send its opinion regarding the misappropriation of Indian currency by the end of this week, according to the department.

DRI will now formally file a case against eight firms which were involved in foreign currency misappropriation after it received opinion from the government’s attorney general, said Laudari.

However, DRI is still not clear regarding the action that it will initiate against banks from where the illegal transaction of customs declaration forms were made, a source at the department said, adding that even Nepal Rastra Bank has not provided any clear hint regarding the action that needs to be taken against at least nine banks who had released foreign currency without making clients fill the foreign currency exchange forms which is mandatory according to the existing legal provisions.

Similarly, The revenue administration is going to accelerate the Post Clearance Audit (PCA) to control revenue fraud. “Checking at the customs points should be carried out in a scientific manner to control irregularities,” said finance secretary Krishna Hari Baskota today.

“The tax administration should initiate to bring professionals under its tax net,” he said, urging the tax offices to compel local traders and firms to issue Value Added Tax invoices and bring suspicious traders and transactions under its radar.

“Revenue mobilisation cannot be effective unless taxpayers realise their obligation to pay taxes,” he said, asking the tax administration to conduct an awareness campaign among taxpayers.

Chief of Nepalgunj Customs Office Purushottam Shrestha said that the office has mobilised revenue worth Rs 2.10 billion till mid-May and it will easily meet the annual target of Rs 2.42 billion. Similarly, chief at Rajapur Customs Office Rameshwar Mishra said that the office has collected a revenue of Rs 621 million till mid-May.

Stating that customs points throughout the country have been witnessing dozens of smuggling cases, Baskota urged the customs officers to control smuggling in coordination with local security agencies and other concerned stakeholders.

He had inspected Rajapur Customs Office, Nepalgunj Customs Office, Inland Revenue Office Nepalgunj and mid-west and far-west regional office of Department of Revenue Investigation.