Income Tax Contribution

Chapter I Introduction 1. 1-Focus of the Study This is the age of reignment training system (MIS) in the business world, which enables circumspection to provide the appropriate data at optimal cost so manager layabout manage in private as well as organization organizations. MIS displace be defined as the system, which provides worthy data that helps management to blast management decisions in a timely fashion. Therefore the information served by management information system is very crucial for a proper management of a business organization.In a process of receiving information from several(a) sectors, MIS use various sectors. As well as we can find the position of income assess in establishment gross. Income task is the main source of disposal r eveue. If high school sources of income value in politics revenue, regimen can make good ontogeny, frugal planning for development of the nation. afterward knowing about the contribution of Income taxation in go vernment revenue of Nepal, we can find the strength and weakness of the government functions and method of aggrandisement the revenue. There atomic number 18 various sources of government revenue. Income tax, VAT, custom duty, foreign aid, sexual and external loan be the main sources. There are various users and interested person and sector of Income tax in government revenue. authorities is the main interested and handles body of income tax. Government can make desirable policies, acts and rules for increasing the government revenue. In up-to-the-minute situation, government must eat up capable revenue for developing the nation. At present government expenditures is in stages increasing but government revenue is non satisfactory.The trend of income tax in government revenue is not satisfactory up departure, even its going down some years. Thinking of taxpayer towards the tax is not positive. The take apart of income tax shows the cognitive process and contribution of taxpayers. Nepal has adopted mix economy. So there is equal contribution of private and macrocosm sector for economic development as well as government revenue. The over only performance of government and taxpayers reflected on contribution of solicitation of income tax in government revenue.Government and financial policymakers can make suitable policies and rules for collecting of high income tax from organizations. Analysis of income tax in government revenue is the souse of financial and accounting interpretation. We can say that analysis of income tax in government revenue is meaningless until and unless it is properly go badd, interpreted and taken each corrective actions to the best way. Therefore the analysis and interpretation part of government revenue is fulfilled by the analysis of income tax.The idea of introducing income tax in Nepal originated along with the first budget on 21st Magh 2008 B. S. (1952 AD). The first pick out government finally introduced Busine ss service and Remune proportionalityn tax set 2017 to promise income tax on remuneration and business profit in Nepal. The Business profit and Remuneration impose map 2017 had very condense coverage that income tax was obligate only on business profit and remuneration. Since this act could not cover all the sources of income, the Nepal Income tax Act 2019 replaced it after two years to avoid such bindbacks.After a year, Nepal Income tax income Rules 2020 were enacted with the view of implementing the objectives of the income tax act. According to the changing condition this act was as well as incapable in fulfilling the needs of changing time, it was replaced by another, Income tax Act 2031. In the course of development and modernization of income tax system, the new Income Tax Act 2058 has been enacted. Similarly, the new Income Tax Rules 2059 have been enacted for the effective implementation of the objectives of the Act.The study will cover the analysis and interpretat ion of all activities relate to income tax such as income tax from Business income, Investment income and Employment income. main purpose of the study is to find out the relationship between income tax and other sources of government revenue, the trends of show of income tax, contributing part of income tax in government revenue and to point out the reasons of low collection and imposed of income tax. 1. 2- direction of the problem Income tax is the main source of government revenue. For the development of nation, any government needs high revenue.For higher the revenue, the main sources is income tax. The economy of a country flourishes with the flourish of government revenue and collection of income tax and it deteriorates with unacceptable performance of Government function in the country. Therefore periodical retread and analysis of Income Tax in the country is very essential. Performance of Income Tax is very constructive for all stakeholders closely attached with the go vernment revenue as well as for a prosperous economic future day of the country. Generating income by any individual or institution is the main sources of income tax.If income is favorable then collection of income tax is also favourable. Lower contribution of income tax in government revenue negatively affects the countrys development. The pas seul of income tax contribution brings the variation of government revenue and government development function. Countrys economic development and government revenue are the closely related parts. For higher revenue, economic development is requirement and for amend economic development of a country, high government revenue is necessary. Nepal is a landlocked country. The trend of collection of income tax is not satisfactory.As kept up(p) above, sustainable economic development and good political environment is necessary for growth the income. Income is source of income tax. Currently, political situation of Nepal is not good. From one decade its being worse. Here is no good environment for income generating functions. previously running organizations also cant perform better. They are going downwards. Individual income is also not a good increasing trend. It affects at once income tax and government revenue as well as government activities. The data of income tax may suffer a lot in lack of proper view and analysis practice of it.Currently contribution of income tax in government revenue of Nepal may not sufficient for development of nation. At the analysis period of data income tax collection remained below the expected level due to various national and foreign level. Therefore, this research study is concentrated on trend of income tax collection to review and analysis the contribution in government revenue and to draw recommendation for coming period. 1. 3-Objective of the study 1. 3. 1 General Objective To analyze the contribution of Income tax in the government revenue of Nepal. 1. 3. 2 specialized objec tive To measure the ability of income tax to meet the government current requirement. To measure the ability of income tax to meet the government long name planning and policies. To measure the operating efficiency and ability to ensure for passable government revenue. To analyze the problems of revenue collection from Income Tax. To suggest some measures for the expediency of Income Tax collection. 1. 4 Signification of the study There are many an(prenominal) institutions and individual that many contribute for government revenue by income tax. nevertheless their ability and willingness is not so good.The counterbalance of income tax in government revenue is not appropriate. The trend of income tax collection also is not sustainable and satisfactory. Much income tax acts and rules were implemented and many of are prompt at present. But they are not properly implemented. For many of these problem there is best alternative to analysis the trend and contribution of income t ax in government revenue. 1. 5 Research Questions For the effective performance and allow for of the study and to state the findings in a core and precise form, the of the essence(predicate) research questions have been structured 1.What is the state of income tax collection? 2. What is the proportion of income tax income for government revenue? 3. What is the trend of income tax collection? 4. What are the findings for coming days? 1. 6 A brief survey of the related literature The related theoretical and previous studies review will be made later on while writing the thesis. Main of these is Budget speech of many fiscal years Performance Review of public and private Enterprises economic survey of many fiscal years report of Income and Expenditure of many fiscal years Statement of Revenue of many fiscal years Different Acts, Rules and regulations, Ordinance and Circulars related to Income Tax associate Research, Thesis, Articles, Journals, Books, Web site etc. 1. 7 Limita tions of the Study The study on Contribution of income tax in the government Revenue of Nepal is not bare(a) from the following limitations i) This study is based on financial statements, Economic surveys, Statement of revenue and Income and expenditure, which are subject to limitation of many National and world-wide causes. ii) This study is based on past datas which are provided by IRD or published. ii) The various methods and formulae are been taken as bar formula, which are worked out on the basis of unlike items and conditions. iv) Mostly secondary data are analyzed. v) The area of income tax is very wide, so all the part of it may not be covered. vi) Being a student, different types of resource constraint is another important factor, which has limited the scope of the study. Chapter-II-Research methodological analysis 2. 1 Research Design A research design refers to the abstract structure within which the research is conducted.The research design is the arrangement of con ditions for collection and analysis of data in a manner that aims to combine relevancy the research purpose within the economy and easy to execution. This study is fundamentally both in analytical and descriptive. 2. 2 Data collection procedure For the study, secondary data will be collected from IRD, Budget speech, Economic survey, Statement of Income, Income and Expenditure and from other related sources. The secondary data related to income tax and revenue are basically from last fifteen years. 2. 3 Tools for analysisTo conduct the study, management and statistical tools such as ratio analysis, trend analysis, correlation regression analysis, variation, weights, diagram, graphs etc. will be used as required by the study. 2. 4 Methods for analysis and presentation variant results will be calculated by using various management and statistical tools, and formula, which are required for this study. Then the data will be presented on suitable tables, diagrams, graphs and formats wit h the help of different suitable computer computer software on the basis of which necessary interpretation and explanation will be drawn. 2. Plan of work The study will be carried out on sequential order, which will be five chapters. The first chapter will make with the introduction of the study, followed by review of literature, research methodology, presentation and analysis of data and conclusion and recommendation in second, third, fourth and last fifth chapters respectively. 2. 6 Bibliography 1. Amatya, S. K. , Pokharel, B. B. and Dahal, R. K. (2004), Taxation in Nepal, M. K. Publisher and Distributors, Kathmandu, Nepal. 2. Budget speech of the Fiscal course of instruction 2055/056 to 2060/061. 3. Economic Survey of the Fiscal course of instruction 2055/056 to 2060/061. . Income Tax act, 2031(1974) and Income Tax act, 2058 (2002) 5. Income Tax Rules, 2059. 6. Income Tax, Circular Collection 2055/56 to 2060/61. 7. Statement of Income and Expenditure of the Fiscal Year 2055/0 56 to 2060/061. 8. Statement of Revenue from 2055/56 to 2060/61. 9. Wolf, H. K. , and Pant, P. R. ,(2002), SOCIAL SCIENCE RESEARCH AND dissertation WRITING, Buddha Academic Publishers & Distributor Pvt. Ltd. , Kathmandu, Nepal. 10. Web sites http//www. ird. gov. np/index1. php http//www. taxresources. com/ http//www. asosai. org/journal1993/revenue_auditing_in_nepal. htm