Metropolis's Financial Bill passed unanimously

Kathmandu Metropolitan City's Financial Bill for Fiscal Year 2022/23 Passed

The Financial Bill of Kathmandu Metropolitan City for Fiscal Year 2022/23 has been passed. The fourth meeting of the 11th Session of the Municipal Assembly, held today at the National Sabha Griha under the chairmanship of Metropolis Mayor Balendra Shah (Balen), passed the bill with amendments.

On the occasion, Assembly Vice-Chairperson and Metropolis Deputy Mayor Sunita Dangol, Assembly Secretary and Metropolis Chief Administrative Officer Loknath Poudyal, along with Municipal Assembly members, were present.

Good suggestions have been brought forward in the Assembly. Assembly Chairperson and Metropolis Mayor Shah said, "Regarding the proposals to adjust tax rates, it appears necessary to consult revenue experts. Suggestions have been received regarding providing certain facilities to taxpayers in exchange for paying taxes. Issues concerning infrastructure have been raised. Concerns regarding public health, environmental hygiene, and management have come up. The issue of community dog management has been raised. Suggestions regarding the management of street dependent individuals have also been put forward. We will take these suggestions into consideration."

Declaring the passage of the bill, Assembly Chairperson Shah stated, "The discussion on the Kathmandu Metropolitan City Financial Bill 2022 presented to the assembly has concluded. During the discussion, suggestions were received to review various heads of taxes, fees, and charges collected by the Metropolis. Since the voice vote of the Municipal Assembly members was heard in favor of the proposal submitted to appropriately modify and amend the received suggestions, I declare that this bill has been unanimously passed with amendments."

No voices of disapproval or abstention were heard in the Assembly. Mayor Shah had presented the Financial Bill for Fiscal Year 2022/23, prepared to implement financial proposals, during the third meeting of the 11th Session of the Municipal Assembly on June 24.

The bill contains administrative provisions for collecting local taxes, service charges, fees, fines, exemptions, and other revenue collection. During the discussion on the bill, Municipal Assembly members Macharaja Maharjan, Asha Shrestha, Santosh Dhungel, Anil Babu Shrestha, Rachana Sunam, and Sharmila Pariyar presented amendment proposals and suggestions.

Key Provisions of the Passed Bill

The bill includes tax provisions under categories such as Property Tax, Land Tax, Rental Tax, Business Tax, Herbs/Scrap/Livestock Tax, and Vehicle Tax. Similarly, provisions cover Advertisement Tax, Entertainment Tax, Rent/Stall Fees, Vehicle Parking Fees, Service Charges, Tourism Fees, Divisible Fund, House and Land Registration Fees, and Revenue and Fee Collection Procedures. Rates for these provisions are determined across 17 schedules.

The Property Tax rate is set at 0.010% (or Rs. 1,000) for the initial Rs. 10 million. For every subsequent Rs. 10 million, rates are proposed progressively at 0.015%, 0.020%, 0.040%, 0.060%, 0.100%, 0.300%, and 0.450%. For valuations above Rs. 100 million, the rate will be 0.600% regardless of the amount. Building valuation rates, depreciation percentages, depreciation periods, and per-aana land valuation rates for property tax purposes are listed sequentially in the schedules. The per-aana valuation of land is specified across 177 points. Similarly, discount percentages are outlined based on categorizations such as main pitched roads, feeder/pitched motor roads with or without outlets, and footpaths.

Rental tax is divided into three categories: residential, office, and commercial, with rental rates determined on the basis of floor area and carpet area. Taxpayers with an annual rental income under Rs. 100,000 and no other source of income may be granted exemptions through a Ward Committee decision.

Business tax rates are structured based on capital investment, nature of business, and financial turnover. Rates are specified for 396 businesses across 9 sectors. Among these, trading goods comprise the largest category with 90 types. Business tax sectors include expert advisory services, manufacturing and industry, agriculture and food business, hotel, tourism and entertainment business, communication services, and financial services, as well as health services, education and training, repair and maintenance, construction, and other service businesses.

To organize vehicle parking, fees have been set by classifying zones and vehicle types. Two zones have been designated. Vehicle types are categorized into two-wheelers, four-wheelers, and vehicles larger than four-wheelers. An amendment proposal was submitted to reduce these fees.

Service charges cover 8 areas: personal recommendations/recommendation letters, house and land recommendation letters, business and organization recommendations, and education/consultancy recommendations. They also include building map verification fees, fees under the Hanuman Dhoka Palace Conservation Program, waste management and sanitation fees, and other miscellaneous charges. One-time fines cover unauthorized parking and various other activities.

Exemption Provisions

Considering the cumulative impact of COVID-19, property owners or lessees operating hotels, resorts, or movie theaters who clear their tax dues up to FY 2021/22 will receive a 40% exemption on their FY 2022/23 taxes. Additionally, a 10% exemption on property tax will be provided until mid-October. This exemption will not apply to outstanding arrears.

Source - http://metronews.kathmandu.gov.np/