Arthabichar Nepal - Guide to Entrepreneurs, Startups, and Business Enthusiast

 An audit is carried out to comply with Income Tax. This is the common understanding we find among the Nepalese business community. It is true but not 100%. The audit does help in getting the tax returns and their supporting schedules error-free & accurate but the main purpose of the audit is to: 1) Ensure Statutory compliance. 2) Identify Internal Control Weaknesses & get recommendations from experts to improve on it. 3) Improve processes to ensure efficiency and effectiveness. 4) Build capacity of the staff & those involved in the process as they get the chance to interact & learn from them the best in the field. Well, but how to ensure all the purposes are met & ensure that audits are being done for the sake of audit. How to turn it into an opportunity to learn more and use it a driver for constantly evolving change? In other words, how to get more out of the Audit Process? Here's what you can do to get better out of the process: Photo credit: @creativevision...

It is true that we cannot always stick to what has been planned or budgeted. There are instances where printers breakdown all of a sudden which now requires immediate repair. As a business, you must have budgeted for it but what happens if the printer becomes unrepairable. It might not be feasible for you to go to stationery shops to get the printouts and you won't be left with an option other than to buy a new one. But, the question is how?  And, believe me! A month doesn't pass by where such unforeseen expense requests/invoices do not appear on your desk for approval. As a business, we should always be ready to manage these. Here's what we suggest: 1) Establish a CONTINGENCY FUND: You can decide the % considering the past trends but we would recommend it be around 2-5% of the total monthly income. Ensure that it is kept separately in the reserve account so that you don't have to borrow or take a loan from the bank to meet the immediate needs. 2) Add a 5-10% buffer/cus...

The concerned Individual has to physically visit the nearest Tax Payer's Service Office or Inland Revenue Department with a copy of the citizenship and passport size photo to obtain PAN No. (Permanent Account Number). But, with Covid-19 disrupting daily life and restricting the movements, the Inland Revenue Department has finally decided to have it automated through its Online System. If you haven't yet registered for Permanent Account Number, you can do so by following the steps below: 1) Visit www.ird.gov.np and click on Taxpayer Portal 2) Click on Registration then, Application for Registration 3) Fill out the necessary detail & click Ok. Once that is done, it will be now going to the concerned IRD office for verification. Tax Officer will go through the detail submitted and verify it 4) Once verified, the concerned individual can log into tho the Tax Payer Portal system with the credentials provided earlier and obtain the PAN no. 5) If an individual needs a hard copy of...

Goods News Indeed! Companies registrar office has finally agreed to the documents submitted online via their web portal and doesn't require to submit any additional paper documents. We certainly hope that these bring efficiency in the work and help companies to get things done smoother. We, also, hope that these will reduce the role of intermediaries who were charging unnecessarily high fees to help companies registered or ensure compliance and also, bring the level of corruption down. 1) Company Registration - New companies should only submit the proposed Memorandum of Association (MOA) and Article of Association (AOA).  2) Compliance -  Annual reports, audit reports, and all other reports required to be submitted earlier. 3) Share Detail -  -      Copy submitted online shall be certified by Company Registrar Office and such certified copy must be kept at the registered office of the Company. Company Registrar Office will only keep the digital copy and it...

Last Fiscal Year Nepal Government declared that every expense must have either a PAN/VAT invoice or paid to those registered in PAN/VAT. This was a surprise and was throwing most of the malpractices out of the bus. The fraudulent activities such as ghost employees, procurement through unregistered mom & pop stores, and most importantly, all the informal/casual/daily workers who were paid out in cash and had no legal records to demonstrate those exist.  It was indeed a good initiative but at the same time government didn't take into account the ground reality. It was and still is hard to find someone registered in tax in rural areas of the country including those working in daily wages or as casual workers. I, personally, think that all the business entities need to get registered and the government shouldn't give them an option. But, even, if we wanted to have all those individuals having the income to file a self-assessment, it might not be feasible for daily workers. Unle...

Given the lockdown due to Covid-19, the Nepal government through the Honorable minister-level decision has extended the period of submission of tax returns and applicable to Jestha 25, 2077 (i.e. 7th June 2020 ) .  Here's the applicable list for the same: 1) Monthly, Bi-monthly, and quarterly VAT returns for the month of Falgun and Chaitra along with the payment of VAT. 2)  Application of refund of VAT for Sec 25D provided the due date for application falls under the lockdown period. 3) Monthly Excise returns for the month of Falgun and Chaitra along with the payment of excise tax. 4) Withholding Taxes (TDS) for Falgun and Chaitra 5) Amended Estimated Tax Return for FY 2076/77 including 2nd installment Advance Tax originally required to be submitted by Chaitra end. This can be submitted by Jestha end , unlike others which have Jestha 25, 2077 as the deadline. 6) Education Service Fee, Telephone Ownership Fee, and Telecommunication Service Fee. In addition, Nep...

Postage Stamp was a mandatory part of the application for registration of a company in Nepal. In fact, it is not only for the registration of the company but for most of the government applications, be it simple handwritten or special forms. Thumb rule is no postage stamp no registration. You must be wondering is it in addition to an application fee or registration fee levied by the government. And, the answer is yes. This is on top of the regular service fee charged.  One can find the postage stamp easily in the nearby shops or cafeteria where such government offices are situated. However, with the Companies Act, 2063, and its directives issued in 2072, the provision of furnishing postage stamp along with application has been repealed. What does it mean? One is no longer required to buy a postage stamp and place it on top of the application or form for registration of the company. Photo credit: Google Image Let us talk about the Postage Stamp itself.  Do you know wh...