MORANG, July 12: The Civil Aviation Authority of Nepal (CAAN) has announced its decision not to pay taxes to the local government at Biratnagar Airport. Rinji Sherpa, chief of CAAN in Biratnagar, clarified that according to the Local Self-Government Act, the airport is exempt from paying any taxes to the metropolis.
Sherpa emphasized that the airport does not fall under the jurisdiction of the local government since it does not serve the metropolis. "Given the centralized nature of our organization, we are not required to pay or submit taxes to any local entities. All tax-related processes and operations are carried out at the central level," stated Sherpa. It should be noted that airports nationwide do not pay taxes to local governments, as they are not obligated to do so.
The auditing of all financial transactions of the authority is conducted by the Office of the Auditor General. During the audit, if any outstanding taxes are identified, they must be duly paid. Sherpa explained, "The revenue generated by all airports throughout the country is deposited in the central office. As a major taxpayer, the center is responsible for submitting the taxes of all airports to the Inland Revenue Office. In cases where contractors fail to file their taxes, the airport assumes that responsibility and adds the tax amount to their payment."
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Sherpa further stated, "If the government decides that airport taxes should be paid to the relevant local government, we are prepared to comply with their instructions. However, currently, the construction of the terminal building has been halted due to pending property taxes. We have already communicated the issues arising from the centralized nature of the project. The authorities will initiate the necessary steps to address this matter."
Expressing concern over the metropolis' failure to collect waste from the airport, Sherpa emphasized the adverse consequences it could have for the environment and air service, citing potential pollution and the risk of bird-related incidents.
Earlier, Biratnagar Metropolitan City had requested the airport to fulfill certain obligations, including passing the house design and paying property taxes and other levies. Unfortunately, due to the airport's reluctance to comply with these requirements, the metropolis suspended waste collection from the airport. However, following discussions with the airport authorities on Friday, the metropolis resumed garbage collection at the airport.
Following discussions between the airport and metropolis officials, Saroj Gautam, head of the Revenue Department of the metropolis, confirmed that the airport has agreed to a deadline for passing the house design of the entire building and paying all outstanding taxes to the metropolis, including property tax. The airport has requested a one-month grace period, with the deadline set for mid-July.
"They have sought a time limit of one month to fulfill their tax obligations and complete the house design," stated Gautam. The metropolis has accepted this request and granted them the one-month timeframe. However, if the tax payments are not made and the house design is not approved within that period, the metropolis will also block the road used for transporting construction materials to the terminal building.
Earlier, the metropolis had ceased waste collection from the airport starting July 5, citing non-payment of taxes. However, after a meeting between the team led by Biratnagar Airport Chief Rinji Sherpa and Nagesh Koirala, the mayor of Biratnagar, the airport committed to paying all outstanding taxes it owed. Consequently, the metropolis resumed garbage collection services at the airport.
Gautam, the head of the Revenue Division, revealed that several institutions in Biratnagar have evaded tax obligations since their establishment. Despite repeated correspondence urging tax payment, these companies have neglected their responsibilities. The metropolis has compiled a list of such institutions and initiated the necessary actions to address the issue.
It has come to light that not only Biratnagar Airport but also other institutions have failed to pay property tax, rent tax, and obtain house design approval. The airport, since its inception, has not fulfilled its tax obligations. The metropolis has consistently urged the airport administration to pay property and rent taxes and to obtain house design approval for both the new terminal building currently under construction and the existing structure, as the map for the latter has not been approved. The construction of the new terminal building, covering an area of 16,277 square meters and costing 2.42 billion rupees, is underway at the airport.
