Registration for PPAN increases by five folds
By CK Khanal
Kathmandu, July 10: Registration on personal permanent account number (PPAN) in tax offices has increased by more than five folds after the announcement of budget of the next fiscal year with the compulsory provision of PPAN to the employees to receive remuneration from their job.
According to the Department of Inland Revenue (IRD), a total of 77,162 individuals have taken PPAN from across the country in between May 15 to July 8, 2019 while the number was only 15,224 in the same period in 2018.
Sources at IRD said that majority of PPAN registration this year was made after the announcement of the budget of next fiscal year on May 29 with the new provision.
The number of individuals taking PPAN in current fiscal year 2018/19 reached 205,696 by July 9. But the number was only 79,694 during the last fiscal year 2074/75. So far, a total of 973,921 individuals have taken PPAN from IRD.
Bishnu Prasad Nepal, director general of IRD, said that there had been crowds in the Inland Revenue Offices to take PPAN after the announcement of the budget.
Number of businesses taking PAN has also increased significantly this fiscal year. A total of 156,588 businesses have taken PAN in current fiscal year while only 117,520 had received it last fiscal year.
He said that the provision of compulsory PPAN to the employees for getting remuneration from their employer company was introduced to control the tax evasion from business organisations by increasing expenditure in the name of fake employees.
He claimed that there was the practice of tax evasion planning of business enterprises by lowering its income and showing expenditure in name of fake employees. This provision will help control such tax evasion practice, he added.
He said that this provision also aimed at increasing the compliance in income tax.
As per the new provision, no employer can include the staff salary and other facilities worth more than Rs. 1,000 in their expenses without providing PPAN record of concerned employees, he said.
Durga Dutta Bhandari, director at IRD, said that the compulsory provision of PPAN to the employees would also be helpful to identify contributors in social security tax. This will support Social Security Fund to involve real contributors into its social security schemes in futures.
The government is collecting 1 per cent social security tax from all employees of formal sector to provide them various security schemes. But the fund has not introduced any schemes so far from the fund thus collected.