Value Added Tax (VAT)

In Nepal, Value Added Tax (VAT) was introduced on 16 Nov. 1997. This tax was levied in place of the Sales Tax, Hotel Tax, Contract Tax and Entertainment Tax. However, it could not be implemented fully until the FY 1998/99 due to political instability and strong opposition from the business community.

VAT replaces the old Sales Tax, Contract Tax, Hotel Tax and Entertainment Tax. It has been designed to collect the same revenue as the four taxes it replaced. Since the collection of both customs duties and income tax depends, to a great extent, upon the effectiveness of VAT, it is expected to help enhance revenue collection.

(VAT) is a broad-based tax as it also covers the value added to each commodity by a firm during all stages of production and distribution. It is a modern tax system to improve the collection of taxes, to increase efficiency and to lessen tax evasion. It is also regarded as the backbone of income tax system in Nepal.

The current threshold for VAT registration is Rs. 2 million. Those vendors whose annual turnover is below the threshold can, however, register voluntarily.

VAT is becoming crucial for the businessman. Because of wrong account keeping. Because of wrong accounting and wrong maintaining of VAT Registers, wrong claims, delay claim, not submission in time etc. reason.

We EG act, we will guide you about VAT, we will identify the problem related to VAT at your organization and will implement a correct way to maintain the system in order to save unnecessary fine and smooth operation of account.

Our VAT consulting offer starts from minimum Rs. 5000 a month. But it depends upon the volume of work and the time spent by our staffs at your offices.