Business Tax Structure in Kathmandu Metropolitan City for 2080-81

Business Tax Structure in Kathmandu Metropolitan City for the Fiscal Year 2080/81:

Kathmandu Metropolitan City recently passed the Economic Bill, 2080, outlining a new tax structure for various business sectors operating within the metropolitan municipality. The bill introduced taxes tailored to the nature and investment situation of individual industries.

Taxation by Industry

1. Manufacturing Industry: Soft drink manufacturers are subject to a tax of Rs 50,000. This extends to major global brands like Coca-Cola and Pepsi-Cola, as well as local names such as Fruity.

2. Domestic Beverage Industry: The renewal tax for locally produced beverages, like soda, is set at Rs 2,000 annually.

3. Distillery Industry: This sector faces a taxation of Rs 50,000.

4. Exportable and Importable Goods: Businesses dealing in exportable goods will be charged Rs 5,000, whereas those dealing in importable goods are taxed Rs 10,000.

5. Film Production and Distribution: Production companies will be taxed Rs 15,000, and distribution companies Rs 5,000.

6. Food and Beverage Industry: Businesses in the mineral water industry, ice cream industry (above three kilowatts), dairy industry, and food industries (above five kilowatts) will pay a tax of Rs 5,000, Rs 10,000, Rs 10,000, and Rs 10,000 respectively.

7. Household Industries: Household industries, including those producing bread rolls, cakes, biscuits, and branded shoes, among others, are subject to varying taxes between Rs 2,000 and Rs 12,000.

Taxation on Infrastructure Development

Infrastructure development plays a vital role in the growth and prosperity of any city. Recognizing this, the Kathmandu Metropolitan City has, as per the Economic Bill 2080, instituted tax rates on various infrastructure development projects:

1. General Infrastructure Construction: A tax of Rs 25,000 is levied on the construction of road bridges, ropeways, railways, tunnels, and flybridges. This tax applies to critical transportation and connectivity projects that significantly contribute to the city's functionality and growth.

2. Building Complexes: The construction of industrial, commercial, and residential complexes also carries a tax of Rs 25,000. These types of developments not only provide spaces for businesses and residences but also contribute to the city's overall aesthetics and functionality.

This structured tax system ensures that those who contribute to the city's development, expansion, and prosperity also contribute to its fiscal health. The funds derived from these taxes are likely to be reinvested in the city, leading to further infrastructural and community development.

Retail and Wholesale Business Taxation

As part of the Economic Bill 2080, the Kathmandu Metropolitan City has rolled out specific tax brackets for retail and wholesale businesses. This taxation system is vital for the city's revenue and ensures these businesses contribute their fair share to the local economy.

1. Grocery Stores: For retail grocery stores, the tax set is Rs 2,000, reflecting the smaller scale of their operations. On the other hand, wholesale grocery stores, given their larger scale, are required to pay a tax of Rs 5,000.

2. Food Sales: Businesses engaged in wholesale food sales are levied a higher tax of Rs 10,000 due to the substantial scale of their operations. Retail food businesses have a more moderate tax of Rs 3,000.

3. Selling Chicken Chicks: Sellers of chicken chicks are taxed Rs 3,000, reflecting the specific nature of this business.

4. Beekeeping Business: Beekeeping businesses have a designated tax of Rs 2,000. This low tax rate can encourage the growth of these eco-friendly businesses.

Taxation on Food and Agricultural Businesses

As outlined in the Economic Bill 2080, tax rates for various businesses within the food and agricultural sectors in Kathmandu Metropolitan City have been set as follows:

1. Fruit, Juices and Vegetable Retail Shops: Retail shops dealing with fresh fruits, juices, and vegetables are required to pay a tax of Rs 1,000.

2. Wholesale Fruit and Vegetable Shops: Wholesalers, dealing in larger quantities, are required to pay a tax of Rs 2,000.

3. Nurseries: Sellers of fruit plants and other nursery items also fall into the Rs 2,000 tax category.

4. Fish/Meat/Egg Retailers and Wholesalers: Retailers of fish, meat, and eggs are subject to a tax of Rs 2,500, whereas wholesalers in this category need to pay Rs 6,000.

5. Processed Meat Products: Businesses selling processed meat products have to pay a higher tax of Rs 5,000 due to the more complex nature of their operations.

6. Agricultural Activities: Businesses engaged in vegetable farming, animal husbandry, and other agricultural activities have been set a tax of Rs 2,000.

7. Pet Shop Wholesalers and Retailers: Wholesalers dealing with pet shop items, such as feed and food for domestic animals, need to pay a tax of Rs 7,000. Retail shops in this sector are taxed Rs 3,000.

Taxation on Hospitality, Entertainment, and Tourism Businesses

As per the Economic Bill 2080, the Kathmandu Metropolitan City has fixed a tax structure for a wide range of businesses in the hospitality, entertainment, and tourism sectors. This is a reflection of the diverse economic activities prevalent in the city:

1. Film Exhibition Houses, Accommodation and Food Services: A tax of Rs 10,000 has been levied on film exhibition houses, ordinary hotels, lodges, guesthouses, and homestays with a capacity of more than 50 people, and restaurants and bars. This reflects the city's vibrant entertainment and hospitality scene.

2. Travel and Trekking Agencies: Given the city's popularity as a tourist destination, travel and trekking agencies are also subject to a tax of Rs 10,000.

3. Wellness and Relaxation Centers: Massage parlors, spas, jacuzzis, saunas, and swimming pools, which provide wellness and relaxation services, will also need to pay a tax of Rs 10,000.

4. Contact Offices of Tourist Sports: The offices that handle operations for various tourist sports and activities such as golf courses, rafting, safari, horse riding, skiing, gliding, water rafting, pony trekking, paragliding, polo, bungee jump, cable car, resorts, and hotels will be taxed Rs 3,000.

5. Hostels: The tax for hostels is determined by their capacity. Hostels accommodating up to 50 people will pay a tax of Rs 3,000, while those with a capacity exceeding 50 people will be taxed Rs 5,000.

6. Make-up Studios: As providers of specialized services, make-up studios will have to pay a tax of Rs 3,000.

7. Fun Parks: The tax for fun parks is based on their area size, measured in ropanis. Parks with an area of up to 5 ropanis will pay Rs 10,000, those up to 10 ropanis will pay Rs 20,000, and parks larger than 10 ropanis will pay a tax of Rs 30,000.

Taxation on Entertainment and Airline Business

The Economic Bill 2080 has detailed the tax rates for various businesses within the entertainment, airline, and related sectors. This classification of taxes emphasizes the diversity and size of the businesses operating in Kathmandu Metropolitan City:

1. Airline Service Providers: A tax of Rs 50,000 has been placed on foreign airline service providers, recognizing their global operations. In contrast, domestic airline services will face a tax of Rs 25,000.

2. Aircraft Leasing Companies: These businesses will have to pay a tax of Rs 25,000, considering their role in supporting the airline industry.

3. Night Entertainment Venues: Discos and nightclubs, which provide night-time entertainment, are subject to a tax of Rs 25,000.

4. Foreign Employment Liaison Businesses: These businesses, facilitating overseas employment, will also face a tax of Rs 25,000.

5. Casinos: Considering their scale and revenue generation, casinos will pay a significant tax of Rs 3 lakh, while mini-casinos are subject to a tax of Rs 25,000.

6. Entertainment and Retail Businesses: Various businesses including those offering goods for hire, entertainment services, dance training centers, music-related services, and tattoo houses will pay a tax of Rs 5,000.

Taxation in the Communication Sector

The Economic Bill 2080, passed by the Kathmandu Metropolitan City, also lays out a detailed tax structure for businesses in the communication sector. The tax varies based on the type and scale of the communication service provided:

1. Television Broadcasting Companies: A tax of Rs 5,000 is set for these businesses, taking into account their broad reach and influence.

2. FM Stations: As crucial providers of regional and local content, FM stations will face a tax of Rs 1,000.

3. Online Service Businesses: Digital businesses offering services online are taxed at Rs 2,000. This acknowledges the growing significance of digital services in today's economy.

4. Online News Portals: The Bill places a tax of Rs 500 on online news portals, recognizing their role in delivering timely news updates.

5. National Newspapers: Recognizing their role in the national information landscape, the tax set for national newspapers is Rs 2,000.

6. Local Newspapers: Local newspapers, which cater to community-specific news, will have to pay a tax of Rs 1,000.

7. Cyber Cafes: Given their role in providing internet services, cyber cafes are subject to a tax of Rs 2,000.

This comprehensive tax framework in Kathmandu Metropolitan City reflects an effort to balance revenue needs while taking into account the nature and scale of various business operations within the city.

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