Six international companies working in the field of information technology and rendering digital services such as Google, Facebook and Microsoft among others have been registered in Nepal's taxation system.
The government of Nepal put in place the provision related to the Digital Service Tax under the Financial Act to bring the foreign companies dealing in electronic services under the ambit of taxation system.
Accordingly, the six international companies were registered in Nepal, said Sadhuram Pudasaini, Tax Officer at the Large Taxpayers' Office.
According to Office, three companies having offices in Singapore- Google Asia Pacific Private Limited, Microsoft Regional Sales -Private Limited and LinkedIn Singapore Private Limited- have been registered in Nepal.
Likewise, three other international companies registered in Nepal are NCS Pearson Inc having Bloomington, USA as its address and EBSCO having Wilmington County of New Castle and Meta Platforms Ireland Ltd having Dublin in Ireland as its address.
With this, social networking sites such as Instagram and WhatsApp and LinkedIn have been registered in Nepal.
While the companies paying Digital Service Tax were being registered in the Large Taxpayer Office, a majority of companies were still outside of the scope of the taxation system predominantly due to flaws or weaknesses in the provision.
Although there is a provision for taking action against not-paying-tax foreign companies registered in the tax offices in Nepal, there is no clear mention of what kind of action to take against unregistered ones.
Furthermore, since such a taxation system is not binding for all companies rendering services in the information technology sector in Nepal, it is understood that many of the companies are still outside the taxation system at present.
A government study has shown that a huge amount of revenue is being lost due to failure to bring the company involving digital transactions and social networking sites being operated in Nepal under the scope of the taxation system.
A report prepared by the Revenue Consultation Committee, citing the www.datareportal.com's finding, stated that there were over 13.3 million Facebook users in Nepal as of 2022.
As per the Statistics, a company providing survey and research results, Facebook alone is earning more than Rs 60 billion annually due to Nepali Facebook users viewing the advertisements put there.
Hemanta Joshi
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