The government’s scheme to expand the tax base by making permanent account number mandatory has affected micro-level businesses in the country like retail shops.
Retailers have claimed that they feel cornered from all sides. They are struggling to understand the procedures for registering at PAN and are being harassed by taxmen looking to extort money from them.
An owner of a retail shop at Swoyambhu said that not all retailers are educated and aware of the tax system. However, as the government has made PAN provision and value-added tax registration compulsory, taxmen have been harassing small shop owners who are yet to comply with these laws.
The government has made it compulsory for all income earners to obtain PAN from the beginning of fiscal 2019-20. The PAN provision for earners aims at expanding the revenue base of the government.
According to NRA, there are more than 60,000 retail shops in Kathmandu valley, out of which, less than 20 percent have acquired PAN and registered at VAT. In this regard, Bajracharya said that the government should have conducted a door-to-door campaign to make people aware of the PAN provision before making it mandatory for everyone. Bishnu Shrestha, a retail shop owner in Chabahil, explained the difficulty in complying with the PAN provision. He said that after he heard about the mandatory PAN provision, he went to the tax office at Chuchepati to know the details. However, the officials there simply told him to fill the online form but he does not have computer skills.