The SAARC. Tax System. Rup Khadka

Transcription

1 The SAARC Tax System Rup Khadka Pairavi Prakashan (Publishers & Distributors) Viddha Mandir Complex, Kumarigalfi Putalisadak (Near Singadarbar), Kathmandu P.O. Box: 9570, Tel: /

2 Contents Chapter-1 Introduction 1.1 Background Geographical/Demographic/Social Situation Economic Condition Fiscal Scene Tax Structure Value Added Tax Customs Duties Excise Duties Individual Income Tax Corporate Income Tax Local Taxes The Way Forward 23 Chapter- 2 Value Added Tax 2.1 Introduction Evolution of VAT/GST in the SAARC Region Bangladesh Coverage in Terms of Transactions Extension to the Retail Level Registration Threshold Truncated System New VAT Code Maldives 28

3 2.2.3 India Preparatory Stage Adoption ofmodvat Dual VAT State VAT Registration Threshold Nepal Commitment to Introduce VAT Preparations for VAT Introduction of VAT Pakistan Introduction of GST Gradual Refinement Experiments with GST Rate New VAT Bill Sri Lanka VAT Threshold Introduction of GST Introduction of VAT 39 Existing Structure General Coverage Coverage in Terms of Production/ Distribution Stages Coverage in Terms of Transactions Registration Threshold Threshold Basis Calculation of the Threshold Retrospective and Prospective Criteria Reference Period 53

4 Level of the Threshold Single or Multiple Thresholds Arguments Pros and Cons VAT Rates Level of the VAT Rate Number of Rates Zero Rating Zero-rating vs. Exemptions Introduction of VAT in the Other SAARC Countries Current Taxes on Consumption Afghanistan Bhutan Fiscal Position Externa! Relationships Introduction of VAT Short-term Move Long-term Approach Future Direction 70 Chapter- 3 Excise Duties 3.1 Background Evolution in the SAARC Region Existing Structure Commodity Coverage Commodity Classification Excise Tariff Input Tax Credit Mechanism Workings of Excise Duties 85

5 3.5.1 Registration/License Physical Control Self-removal Procedure Excise Stickers Assessment Filing and Payment Requirements Excise Duties under the Federal System Conciusion 93 Chapter- 4 Customs Duties 4.1 Background Development Early History Recent Changes Afghanistan Bangladesh India Nepal Existing Structure and Operation Coverage Classification of Commodities Valuation Customs Tariff Post Clearance Audit Automation The Way Forward 116

6 Chapter- 5 Individual Income Tax 5.1 Introduction Developments Afghanistan Bangladesh Bhutan India Nepal Pakistan Sri Lanka Sources of Income Fringe Benefits Exemptions Deductions Business Expenses Personal Expenses Standard Expenses Source vs. Worldwide Basis Allowances Basic Allowance Spouse/Dependent Allowances Appropriate Level of Basic Allowance Rate Structure Presumptive Taxes Tax Withholding Tax Unit Taxation of Retirement Income Taxation of Capital Gains Conclusions 162

7 Chapter- 6 Corporate Income Tax 6.1 Background Rationale for a CIT Integration of the CIT and IIT Deductible Business Expenses Non-deductible Expenses Depreciation Treatment of Losses Tax Rates Fiat Rates CIT Rates Minimum Alternative Tax Tax Incentives Concluding Remarks 197 Chapter- 7 Looal Taxes 7.1 Background Local Govemments Afghanistan Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka 203

8 7.3 Taxing Authority of Local Governments Afghanistan Bangladesh Bhutan India Nepal Pakistan Sri Lanka Implementation of Local Taxes Kathmandu Municipality Land Revenue/ß/iwmi Kar House and Land Tax Professional Tax House Rent Tax Advertisement Tax Vehicle Tax Entertainment Tax Composition of Tax Revenue Kolkata Municipal Corporation Property Tax Tax on Advertisements Tax on Carts and Carriage A Toll on Ferry and Bridges A Toll on Road Levy of Surcharge on Transfer of Lands Levy of Special Conservancy Charge Howrah Bridge Tax An Evaluation Conclusion 226

9 Chapter- 8 Summary 8.1 Value Added Tax Customs Duties Excise Duties In di vi dual Income Tax Corporate Income Tax Local Taxes Summing-up 239 Select Bibliography 240