We see lots of posts on Facebook, Instagram, and TikTok around how to become a millionaire or billionaire. Most of them repeat the same thing; start your business, begin investment early, get into the real estate flipping business, be a stock trader, etc. I don't think there is anything new there. We have heard these since we were young. At least, me.
Let us talk about something new today. And, believe me, everything we will be unrevealing here is 100% legal. Yes, it is possible to become a millionaire.
You must be wondering how? All you have to do is catch some bad dudes trying to evade or have evaded taxes and report to the Inland Revenue Department. Yes, stop wondering about jobs, start your own hustle, work as an informant to the tax office. It will help you get substantial rewards. However, you should be careful, do remember that sharing false information can also get you in trouble.
Who can inform and how?
An informant can be an individual or group of people who give particular information to the IRD about tax evasion or intention of evasion. Information needs to be furnished in the written form backed by the proof of such evasion. Proof depending on the nature of evasion can be invoices, general ledgers, falsified records/tax returns, etc.
There is no specific format prescribed under the Act. It doesn't specify the medium of information sharing either. Can it be electronically via email or handwritten through post or has to be dropped physically in the nearby tax office?
What it mentions is that information along with the evidence that needs to be submitted. I believe, to know the genuineness of the informant, they would like to have personal details such as Name, Date of Birth, Residential Number and contact number, etc.
The act doesn't specify whether a foreigner can be an informant. However, since it only uses the word informant, I am of the view that both local and foreigners can be an informant.
Safety of Informants
Procedure on how the anonymity of the informant will be kept is not prescribed in the law itself however, it does state that the name, date of birth, residential address, and any other personal details will be kept confidential. This should definitely encourage us to work as informants.
Reward Process
IRD will conduct an investigation based on the information you have submitted. As a result of the investigation, if the tax office is able to collect additional taxes from the evader then, you will be rewarded with 20% of the additional taxes realized that are directly attributable to the information from your side. IRD might also pay you NRs. 10,000 for your out-of-pocket expenses.
Let us understand this from an example.
Fraud Co. registered in VAT sells a computer & its parts using an "Estimate bill" and doesn't give you a tax invoice. You, then, came to realize that they were actually underreporting the income for all such sales made out of "Estimate bill" NRs. 10,00,000 (10 lakh) and thus, Fraud Co. has filed a falsified tax return. As a general public & good citizen, if you file a written complaint along with the evidence you will be awarded NRs. 1,04,000 (1 lakh 4 hajar) following IRD also concludes Fraud Co. has indeed underreported income, falsified tax returns, and thereby, evaded tax.
Let us now understand how the reward amount of NRs. 1,04,000 was reached:
In our case above, under-reported income = NRs. 10 lakh
Since this is a company, corporate tax is 25%. Additional tax liability for Fraud Co. would be NRs. 250,000 (25% of under-reported income)
Tax evasion is an offense hence, Fraud Co. will be penalized 100% of additional tax liability under Sec. 120 which is NRs. 250,000
Now, depending on when tax evasion happened (i.e. which Income Year) and when it was identified, IRD will apply interest on additional tax liability under Sec. 119. I am assuming it to be NRs. 20,000
Because of the information furnished, IRD is able to collect NRs. 520,000 from the Fraud Co. (Additional Tax + Fine + Interest).
Thus, the reward would be NRs. 104,000 (20% of total tax collected i.e. NRs. 520,000)
What happens when the informants are a group of individuals?
In such a case, the reward amount will be pro-rated according to the number of individuals involved as informants. In the above example, let us say it was reported by 3 individuals, then, they will each get NRs. 34,666.67 (NRs 104,000/3)
Conclusion: You will be rewarded for your hard work and helping government bring just on the tax system however, you should also be careful around not submitting false information as it can subject to prosecution. Besides, most of the companies take extra measures to have their financial information confidential and might not be easily accessible to the general public.
Comments
Post a Comment