Taxpayer Incentive Gift Program Operating Procedures, 2083
Frequently Asked Questions (FAQ)
Q1: What is the “Taxpayer Incentive Gift Program Operation Procedure, 2083” and why is it introduced?
A: It is a procedure issued by the Government of Nepal, Ministry of Finance, to operate the Taxpayer Incentive Gift Program in a simple, convenient, systematic and effective manner. Its main objectives are to develop a culture of taking/giving invoices in the purchase and sale of goods and services, to increase tax compliance, to encourage the recording of real transactions, and to motivate consumers to compulsorily take invoices when buying goods and services.
Q2: When does this procedure come into effect?
A: The procedure comes into effect from Shrawan 21 2083 BS.
Q3: Who qualifies as a ‘consumer’ under this procedure?
A: ‘Consumer’ means a natural person within Nepal who purchases goods or services for their own use/consumption.
Q4: Who operates this program?
A: The Inland Revenue Department operates the program.
Q5: Who is eligible to participate in the program?
A: Any consumer who purchases goods or services for own use within Nepal worth more than Rs. 100 (one hundred rupees) in a single transaction is eligible to participate.
Q6: Which purchases (by time period) are included in a given month’s program?
A: Purchases made through electronic payment, and invoices entered into the system, between the 1st and the last day of a given month are included in that month’s program.
Q7: How many gift tickets does one eligible purchase generate?
A: Each eligible participating purchase invoice and each purchase made through electronic payment generates one gift ticket from the system. An invoice entered into the system is eligible to participate only once.
Q8: Which invoices are NOT eligible to participate in the program?
A: The following invoices are not eligible: (a) invoices for business/commercial purposes, (b) invoices issued in the name of a government body or public institution, (c) invoices for telephone service, internet service, electricity, vehicles/means of transport, and air ticket purchases, and (d) invoices for purchases from a person who does not have a Permanent Account Number (PAN). Additionally, the same invoice or the same electronic payment cannot be used to participate more than once.
Q9: What is the process to participate in the program?
A: Purchases made through electronic payment via a payment service provider are automatically included in the program. For other eligible invoices, the consumer must, within the prescribed period from the invoice date, enter the following details into the system: invoice number, seller’s PAN, invoice issue date, total amount on the invoice, mode of payment (cash or electronic), buyer’s name, and buyer’s mobile number. The system automatically verifies the entered details before including the invoice.
Q10: When and how are winning consumers selected?
A: The Department selects winning consumers twice a month, on the 1st and the 16th through an automated system. The selection on the 1st covers transactions from the 16th of the previous month to the end of that month, and the selection on the 16th covers transactions from the 1st to the 15th of that month.
Q11: What are the daily and fortnightly (bumper) winners?
A: One daily winner is selected automatically for each day, and additionally, one fortnightly ‘bumper’ winner is selected once every fortnight from among that period’s participants.
Q12: How much is the gift amount?
A: The daily gift amount is Rs. 1,33,334 (one lakh thirty-three thousand three hundred thirty-four rupees) per winner. The fortnightly bumper gift amount is Rs. 10,00,000 (ten lakh rupees) per winner.
Q13: Is tax deducted from the gift amount?
A: Yes. Tax at the rate of 25 percent is deducted from the gift amount as withholding tax on windfall gain, under Section 88Ka of the Income Tax Act, 2058.
Q14: What must a winner do to claim the gift?
A: The winning consumer must submit an application, either in person or through an authorized representative, to the nearest Inland Revenue Office within five days of the gift being announced.
Q15: What documents must be submitted with the claim application?
A: The following documents must be submitted: (a) the original invoice, (b) a copy of the national identity card, citizenship certificate, passport, driving license, or other similar official identity document, (c) bank account details, and (d) Permanent Account Number (PAN).
Q16: Within how many days is the gift distributed after the claim is filed?
A: The Inland Revenue Office must verify the submitted documents and details and distribute the gift within ten days. The gift amount is paid directly by the Department into the bank account provided by the winning consumer.
Q17: What happens if a winner does not claim the gift within the prescribed time?
A: If a winning consumer does not come forward to claim the gift with the required documents within the five-day period, the gift amount is deposited into the Prime Minister Disaster Relief Fund.
Q18: Is the name of the winning consumer made public?
A: Yes. The names of selected winning consumers must be published on the Department’s website and through social media. Winners must also be informed of their selection via their mobile number and email.
Q19: What happens if submitted documents are found to be false or fake?
A: If, upon verification, the submitted documents are found to be false, fake, or forged, the matter is referred in writing to the concerned authority for action against the persons involved, as per prevailing law.