Hotels inquire on taxes

The major hotels based in the Capital have started making inquiries at their respective wards after the Kathmandu Metropolitan City (KMC) charged them of ignoring property taxes for more than a decade.

The metropolis has renewed the waste collection service since the hotels committed to pay their taxes by the last week of May.

KMC, two weeks ago, had cut off waste collection after the hotels ignored the final call to clear house and land taxes. However, the metropolis set a deadline to pay tax and continued to offer its service on the request of hotel owners. “They asked us for a 15-day cut off date. The hotels have now made efforts to inquire about the taxes and are ready to submit their property details,” said Mahesh Kafle, chief of the Revenue Department at KMC.

According to Executive Director of Hotel Association of Nepal (HAN) Prabesh Aryal, the hotels are preparing to submit their property tax details in the next two weeks. “We have agreed on the tax clearance. If the urban development ministry made efforts to define the tax costs of these hotels through their categories, it would be much more convenient for us,” said Aryal.

Kafle, however, said the metropolis would just request the ministry to amend the act for the feasibility of the hotels. “The hotels are eyeing to withdraw a few of its components to reduce its taxes. But even with the amendment of taxation policies the hotels will have to clear their pending taxes,” Kafle said.

The hotels blacklisted include Bouddha-based Hyatt Regency, Radisson and Shangri-la at Lazimpat, Everest at New Baneshwor and Yak and Yeti at Durbarmarg among others. Of all the hotels in the Capital only hotel Annapurna has an up-to-date tax clearance, said KMC. KMC is likely to recover around Rs 60 million when the hotels pay their pending taxes. Hotel owners had recently expressed dissatisfaction over the ‘illegal’ metropolis drive, claiming the government law exempts them from property taxes.

 KMC, in reponse, stated the law exempts only certain components of the hotel including swimming pool, parking, rooms and garden while other components like administrative office, lobby, staircase and the go down would be taxed.

KMC in Janauary had blacklisted 1,385 commercial complexes built in over 10,000 square feet of land for defying  tax rules for several years.

source: the kathmandu post,15 may 2014