The Kathmandu Metropolitan City (KMC) and United World Trade Centre (UWTC), one of Capital’s leading shopping malls, are at loggerheads over pending land and housing taxes.

With KMC threatening to close down the mall for failing to clear the taxes, the UWTC management on Monday made it clear that it has no obligation to pay such taxes.

UWTC Managing Director Sakunta Lal Hirachan said mall operator United Builders and Engineers is a lease owner and that real owner Tribhuwan University (TU) is responsible for paying such taxes. United Builders had entered into a 32-year lease agreement with TU in 2003.

However, KMC officials say United Builders is legally obligated to pay the land and housing taxes. According to KMC, as per the Local Self-Governance Act 1999, the Metropolis Council has the right to decide on the land/house tax on properties within it. “Using this right, the Metropolis Council made a decision in fiscal year 2005-06 to collect tax from the lease owner,” said Ram Prasad Poudel, tax officer at KMC. “After that decision, we immediately dispatched a letter to UWTC to present tax details and clear the land and housing taxes, but they turned a deaf ear.”

But Hirachan said they replied to the letter and also spoke with KMC officials a couple of times. “We clearly mentioned that we are just the lease owner and we have no obligation to pay land and housing taxes,” Hirachan said at a press meet

here on Monday. “TU is responsible for paying such taxes as per the clause-14 (2) of the agreement between TU and United Builders.”

KMC officials, however, said the agreement not their concern. “The Local Self-Governance Act 1999 is clear about the issue and I urge UWTC to come into the tax bracket by presenting the details,” said Poudel, “Otherwise, we will be forced to padlock the mall.”

With KMC threatening to pull down shutters, over 150 retailers and other vendors at UWTC are worried about whether the tussle would mar their Dashain business.

source: The Kathmandu Post(2011),"KMC, UWTC at odds over land and housing tax", The Kathmandu Post,19 Sept 2011