main_image
NEWS
bottom
bottom

HAN, KMC lock horns over house, land tax

Hotel Association of Nepal (HAN) has taken exception over the recent move of the Kathmandu Metropolitan City (KMC) to collect house and land tax from hotels, claiming that such tax was against the ´Land and Building Tax Act 2019 BS´.

“KMC has sent letters to hotels, asking them to clear land and house tax at the earliest. It has also warned of strong action against hotels that do not pay such taxes,” BK Shrestha, president of HAN, told a press meet on Wednesday.

He, however, claimed such tax was illegal. “Clause 12 of the Act exempts the hotels from paying house and land tax. Also the Clause 3 of the same Act states that this Act will determine the land and house tax irrespective of whatsoever provision in others acts. Since the act has not been annulled yet, hotels are not required to pay such taxes” Shrestha argued.

However, KMC officials claim that the hotels are liable to pay the house and land tax as per the Local Governance Act, 1998. KMC has stopped collecting garbage from hotels for the past one week after they failed to pay house and land tax.

“It is true that Land and Building Tax Act 2019 BS exempts the hotels from paying tax of place where hotel visitors stay, restaurants, parking space and garden area,” Mahesh Kafle, chief of KMC´s revenue department, told Republica. “We have asked them to furnish tax of house and land used for non-hotel purposes like office secretariat, lobby and the space rent out to other offices, among others.”

Kafle also refuted HAN´s claim that KMC was trying to collect ´illegal´ taxes. “If hotels have utilized 100 percent of their space as per Clause 12, they should come and declare such condition. Then we will not enforce any tax on them,” Kafle said, adding that KMC won´t spare hotels if they fall under the tax net.

Big hotels as well as commercial complexes in KMC are yet to file house and land tax for the past 15 years. KMC officials estimate that five-star hotels owe an average of Rs 300,000 a year each as house and rent tax.

Kafle asked the hotels to come and declare their tax at the KMC office at the earliest. “We have stopped collecting garbage from hotels. If they still do not heed our call, we will start the process to freeze their bank accounts,” Kafle said, adding, “Even if they do not pay, we will collect the tax by auctioning off their property.”

source: republica,7 may 2014