December 13: The government has refunded Rs 38 billion in taxes in the last nine years. According to the Inland Revenue Department (IRD), it received claims for tax refunds equal to Rs 99.47 from the fiscal year 2071/72 to 2079/80. Out of the total claims, the government has approved and refunded Rs 38.6 billion. According to the department, claims for tax refund have increased in recent years.

In the last fiscal year, out of 840 claims for tax refund worth Rs 19.1 billion, the department approved tax rebate of Rs 4.58 billion as claimed by 498 taxpayers. The rest of the claims were rejected by the department.

Nine years ago, in the fiscal year 2071/72, the tax rebate amount approved by the Rs 5.5 billion out of the total claims of Rs 9.91 billion. The government has been refunding taxes incurred on diplomatic missions, various exemption facilities, etc.

Lately, there has been an increase in claims from diplomats as well. In the last fiscal year alone, the government returned Rs 1 billion of taxes to diplomatic missions and diplomats. Their claim made by them were much higher than the amount refunded.

In its annual report published recently, the department has mentioned that the claimants did not submit the bill properly and did not complete the process according to the law. As a result, the approval amount was less than the claims made for tax refund.

According to the department, Section 25 of the Value Added Act, 2052, has a provision to refund diplomatic missions and diplomats recognized by the Ministry of Foreign Affairs if they make claims within three years from the date of transaction.

In same section, there is a provision of tax rebate to foreign tourists, and to contractors and pharmaceutical companies in case of overpayment.

"It seems that the exemptions provided by the tax authorities have resulted in reduction in revenue generation," said a former revenue secretary, adding, "The trend of arbitrary tax withdrawal based on the decisions of the Council of Ministers has been seen in recent years. It is necessary to stop it.''

He believes that the government should not give back rebate arbitrarily.