From November, all business owners will need to open a current deposit or CD account to run their businesses. Those who fail to do so can be fined up to Nu 5,000. The Department of Revenue and Customs announced this recently in a move to deal with tax evasion.
“What we have observed in past is that businesses are using personal saving accounts to receive the payments against their business transaction. So, this has posed difficulties for income tax officials to verify the transactions. So basically, in order to capture all the business transactions into the business account, we issued a notification on 17th August 2022, requesting all the businesses to open CD account if they haven’t opened one,” said Gyeltshen, the Offg. Director-General of the Department of Revenue and Customs.
He added that this is to maintain a record of all the payments made for proper disclosure of income. The new rule also applies to Civil Society Organizations and Religious Organizations.
The department said its regional offices will monitor and inspect from November. The department says they will impose fines for those failing to comply with the new rules.
Some of the business entities also welcomed the initiative.
“I think it is the right time to open a CD account. If we can open a CD account, the transactions, tax and loan repayment will be easier for us,” said Kinzang Wangdi, a business owner.
“Customs officials are telling us to open a CD account. We are asked to do the transaction through that account,” said Dil Maya Bhattarai, a shopkeeper.
“Till now, we didn’t know that we have to open a CD account. So far, I have been using my saving account. If the government orders us to open the account, then we have to open it,” said Yeshi Dema, a shopkeeper.
There are about 62,000 business entities across the country and they have contributed over Nu 10bn to the Department of Revenue and Customs in tax for the income year 2021.
Karma Wangdi
Edited by Tshering Zam
