Budhigandaki Hydropower Project

Two changes in compensation worries affected families

Published On: October 10, 2018 10:01 AM NPT By: Republica  | @RepublicaNepal


KATHMANDU, Oct 10: Families affected by the Budhigandaki Hydroelectric Project have said that two changes related to their compensation—first, in the valuation of their houses and second, a new threshold for capital gain tax rates for the income due to compensation—have affected them badly. 

The change in the valuation of house has lowered the amount families would receive now onwards, compared to the usual rates they received earlier. The change in the threshold for capital gain tax on income due sale of house and land will incur losses for them, according to the affected families. The changes were introduced in the budget that came into effect in mid-July. 

The compensation paid before mid-April 2018 for the third category of assets (houses that are connected with local road) was valued at Rs 773,000 per house but the price was reduced to Rs 525,000 this year (after mid-April). 

After the change, valuation of a house connected with local road, which also should be in the survey map, has left many families not eligible to get the amount of Rs 773,000 that they would previously get. 

Hare Ram Dhakal, coordinator of Budhigandaki Hydropower Concern Committee, a local group of affected families, claimed that the survey map was not an issue previously but now this has become a matter of concern for them. This has reduced the amount that the affected families will receive hereafter, he said. 

There are 11 categories of assets for distribution of compensation to the 3,560 households affected by the reservoir plant of 1200 MW. 

Dhakal further said that the changes have hugely reduced the amount the families would get in compensation. He also informed that they have started a signature campaign of the locals, which they will soon submit to the Ministry of Energy, Water Resources, and Irrigation. 

Dilip Kumar Saduala, the ministry’s focal person for the project, said that they have been receiving such complaints unofficially from the locals. “We will soon look into this matter. If the problems are genuine, we will settle it with priority,” he said. 

The tax rates which came into effect from mid-July has lowered the capital gain tax threshold to Rs 1 million from Rs 3 million on sale of land and house. Dhakal complained that the change in the tax rate has affected them as they have to pay more tax now. 

“We have to pay 2.5 percent capital gain tax for compensation for property that was inherited or purchased before 2013. But for the property inherited or purchased afterwards, families have to pay 5 percent tax,” added Dhakal. 

Speaking at the parliament’s Finance Committee, Hari Raj Adhikari on Sunday had said that the government has not been treating all those affected families equally on the land compensation rates and capital gain tax. He had demanded revision of the capital gain tax provision and valuation of assets especially for this project. 

Dhakal also said that they have not been given a waiver of land registration fee on purchase of land elsewhere using the compensation money, though the local authority had said that the affected families will be exempt from paying land registration fee on purchase of land up to the worth they receive as compensation.

 


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