Stepping up its tax collection drive, the Kathmandu Metropolitan City (KMC) has cut off basic services to 31 entities, including popular hotels and business complexes in the Capital, after they ignored the final call to clear their taxes.
The metropolis has stopped collecting garbage from some of the major five star hotels after they failed to clear the outstanding taxes within the deadline.
“We are compelled to take this step to recover taxes which have remained unpaid for over a decade,” said Mahesh Kafle, chief of Revenue Department at the KMC. The KMC had asked all the hotels to submit their tax details last month, but most of them did not heed the call.
Bouddha-based Hyatt Regency, Radisson and Shangri-la at Lazimpat, Everest at New Baneshwor, Yak and Yeti at Durbarmarg were among the defaulters, said Kafle. Of all the hotels, only hotel Annapurna has an up-to-date tax clearance.
“They have been ignoring our repeated calls to clear their taxes. We have also corresponded with the concerned stakeholders to freeze the properties of the defaulters,” said Kafle, expressing hope that this action would prompt others to clear their taxes soon.
“If they continue to overlook our calls, we will ask the Nepal Electricity Authority to cut off their power supply,” he warned.
Under the Local Self Governance Act (1999), the KMC is entitled to collect taxes relating to house and land, business, rent, advertisement and entertainment. The Act also authorises the metropolis to freeze and auction off the properties of the defaulting parties.
In its first stern action against tax defaulters, the KMC had last month sealed the office of a Thapathali-based Trade tower which had Rs 10 million in unpaid taxes. The housing company paid off a partial amount of Rs 3.5 million and committed to clear the remaining amount by the end of the fiscal.
Similarly, the Bhatbhateni supermarket cleared the partial amount of Rs 4 million. The KMC has offered a provision allowing tax payers to pay in instalments for amount exceeding Rs 1 million.
In January, the KMC had notified house and land owners to clear their taxes within the second week of the month. The metropolis have blacklisted 1,385 commercial complexes in the Valley for defying tax rules for years.
According to the KMC, RB Complex, Karmachari Sanchaya Kosh and KL Tower are among the properties with about Rs 1.5 million each in outstanding dues. The Nepal Electricity Authority has Rs 120 million of back taxes.