Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The Inland Revenue Department Nepal has made it mandatory for businesses with annual transactions exceeding Rs 200 million (Rs 20 crore) to integrate with the Central Billing Monitoring System (CBMS), tightening compliance and advancing real-time tax oversight.
The directive, recently circulated to all tax offices, follows a decision aligned with the Central Market Monitoring Committee, requiring all high-turnover taxpayers—except banks and financial institutions—to be connected to the CBMS platform.
Introduced in 2018, the CBMS was initially rolled out targeting departmental stores, before gradually expanding to hotels and other large-scale businesses. The system aims to capture real-time transaction data, enabling accurate tax assessment and minimizing underreporting.
Previously, the mandatory threshold was set at Rs 250 million, but the latest revision lowers it to Rs 200 million, indicating a policy shift toward broader tax base coverage. Earlier phases had even higher thresholds—starting from Rs 800 million annually—before being progressively reduced.
Although the department has adopted a policy direction to eventually integrate all electronic billing users into CBMS, implementation currently remains tied to turnover thresholds.
Under the system, every billing transaction is reported instantly to the department’s servers, ensuring transparency in business operations. Authorities argue that this real-time data flow benefits both the government and taxpayers.
For the government, it enhances efficiency in tax determination and collection. For businesses, it reduces disputes and administrative complications by maintaining verifiable digital records.
Despite the progress, integrating smaller retail segments remains a significant challenge. The department has set a long-term goal of bringing even small-scale retail transactions into the real-time monitoring framework.
However, officials acknowledge that sectors such as high-volume fashion retail in Kathmandu may pose compliance and technical challenges during implementation.
The CBMS initiative is part of Nepal’s broader fiscal reform agenda, aimed at strengthening transparency, reducing tax evasion, and minimizing human intervention in tax administration.
Authorities believe that once fully implemented, the system will significantly reduce tax disputes and improve trust between taxpayers and the government, while aligning Nepal’s tax infrastructure with global digital compliance standards.
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