New Finance Act in Kathmandu Metropolitan City: Registration of business by mid-October exempts tax of previous years 

Kathmandu. KATHMANDU: The Kathmandu Metropolitan City (KMC) has decided to waive the business tax of all previous years if it is registered within mid-October of this year.

A provision in this regard has been made in the Finance Act passed by the 19th session of the municipal assembly. The act categorizes all types of trade and businesses operating within the metropolitan area into 12 categories and determines the rate of registration and renewal. The nature of the business, capital investment and scope of work are considered on the basis of taxation.

Earlier, the fiscal year 2072/73 was considered as the base year of taxation. It has been amended to make the fiscal year 2079/080 as the base year of tax.

The Act has made it mandatory for the business to be registered by mid-October, 2083. A discount of 10 percent will be provided if you register during this period. If you are late beyond this period, an additional fine of Rs 1,000 will be imposed.

10 Merchandise and Shops

The Act categorizes commercial goods on the basis of luxury and necessity. Likewise, the tax on foreign liquors is Rs 30,000 and Rs 25,000 for those importing foreign liquor.

Similarly, the wholesale shops of gold and diamonds and pearls will be charged Rs 30,000 while the retail shops will be charged Rs 5,000 to Rs 10,000. Similarly, departmental stores will be taxed at Rs 1,25,000 and business mart (complex) will be taxed at Rs 100,000. Retail prices range from Rs 1,500 to Rs 10,000 in bulk for footwear, clothes and groceries.

20 Expert Consultation Service

Foreign researchers or consultancies have been charged Rs 50,000 in the consultancy sector. In case of domestic consultancy, tax will be levied from Rs 3,000 to Rs 10,000 depending on the capital.

The fee has been fixed at Rs 25,000 for foreign employment consultancy and Rs 10,000 for foreign education consultancy. For engineering, auditing and law firms, the fees range from Rs 3,000 to Rs 10,000. The tax has been fixed at Rs 3,000 for online businesses and e-commerce platforms.

30 Manufacturing businesses and industries

Similarly, light beverage industries and distilleries will be taxed at Rs 50,000. A tax of Rs 50,000 has been levied on industries producing underground water and Rs 7,000 for those producing bottled water.

Printing presses, garments, shoe factories and food industries will be charged Rs 2,000 to Rs 12,000 depending on the capital and capacity. The tax has been fixed in the range of Rs 10,000 to Rs 50,000 for hydropower and electricity trading companies.

40 Agriculture and Food Business

The government has fixed a fee of Rs 15,000 for the big vendors in the agriculture sector. The tax will be levied at Rs 6,000 for wholesale fish, meat and eggs, while Rs 2,500 for retail sales. Businesses such as nursery, beekeeping and vegetable farming will be taxed at Rs 2,000. The veterinary hospital will have to charge Rs 15,000 while the modern animal slaughterhouse will charge Rs 10,000.

50 Hotels, Tourism & Entertainment

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The highest tax in this category is Rs 3 lakh for casinos. Five star hotels have to pay Rs 100,000, four-star hotels Rs 80,000, single-star hotels Rs 20,000 and general hotels Rs 10,000. Homestays and small restaurants will charge between Rs 3,000 and Rs 10,000. The tax has been fixed at Rs 50,000 for foreign airlines and Rs 25,000 for domestic airlines. The price for multi-screen cinema halls has been fixed at Rs 12,000.

60 Communications Services Business

In the communication sector, a tax of Rs 1 lakh has been levied on telecom and mobile service providers. Internet and cable TV providers will charge Rs 10,000 to Rs 40,000 depending on the number of subscribers.

A tax of Rs 500 has been levied for online news portals, Rs 1,000 for local newspapers and Rs 2,000 for national newspapers. Courier service will charge from Rs 5,000 to Rs 25,000.

70 Financial Services Business

The central office of commercial banks will be taxed at Rs 1 lakh and branch offices will be taxed at Rs 50,000. The central office of Bikas Bank will charge Rs 75,000 while the finance company will charge Rs 50,000. Cooperatives will be taxed from Rs 2,000 to Rs 15,000 depending on the region and level. Insurance companies and share broker companies have been charged Rs 50,000 respectively.

80 Healthcare occupations

In the health sector, a tax of Rs 3 lakh has been levied on medical colleges. In case of hospitals, the charges range from Rs 15,000 to Rs 1,50,000 depending on the number of beds. The fee for polyclinic has been fixed at Rs 15,000 and for general clinic Rs 7,500. The tax will range from Rs 15,000 to Rs 75,000 depending on the investment. Labs and diagnostic centres have been charged between Rs 5,000 and Rs 25,000.

90 Education and Training Business

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In the education sector, secondary schools will have to pay tax ranging from Rs 30,000 to Rs 100,000 depending on the number of students. Fees range from Rs 10,000 to Rs 100,000 for colleges and universities. Montessori and basic schools will be taxed from Rs 5,000 to Rs 30,000. The fees for computer, language and skill training centres range from Rs 3,000 to Rs 10,000.

100 maintenance business

The tax will be levied at Rs 50,000 for heavy vehicle service centres and Rs 15,000 for light vehicle service centres. Similarly, general motorcycle repair centre has been charged Rs 5,000 while mobile repair shop has been charged Rs 2,000. For small tasks such as electronics and watch repair, the fee ranges from Rs 1,500 to Rs 2,000.

110 Construction business

For construction purposes, Rs 25,000 will be levied to the head office and Rs 5,000 to branch of ‘A’ class contractors. The ‘B’ class ‘B’ category will charge Rs 20,000, Rs 15,000 for ‘C’ class and Rs 10,000 for category ‘D’. Tax has been fixed in the range of Rs 25,000 to Rs 50,000 for the hydropower company.

120 Other services and businesses

Under this category, housing companies and real estate businesses will be taxed from Rs 20,000 to Rs 50,000. The agency has been charged Rs 5,000, the security service Rs 15,000 and the party palace Rs 20,000.

The driving center will charge Rs 3,000 to Rs 7,000 depending on the nature of the vehicle. The tax has been fixed at Rs 10,000 on ride-sharing and goods transport business. Beauty parlors and salons have been charged from Rs 2,000 to Rs 7,000 depending on the level of service.

The metropolis has urged all the entrepreneurs to complete the legal process by paying the tax on time.

In the case of businesses not included in the list of the Finance Act, the rate will be determined on the recommendation of the Revenue Committee.