Bigwigs evade taxes, owe Mechinagar municipality over Rs 267 million

Published On: February 7, 2018 09:47 AM NPT By: Republica  | @RepublicaNepal

JHAPA, Feb 7: The tax overdue of Sanghai Group to Mechinagar Municipality has exceeded Rs 250 million. The group, like many others, has refrained from paying taxes for the past many years.

This has compelled the municipality to call for the central government's attention in order to collect revenue from the tea gardens that the group possesses under Nepal Tea Development Corporation (NTDC).  

Sanghai Group's leftover unified property tax, land and house ownership tax, and penalties for NTDC exceed Rs 250 million. A group of people's representatives from the municipality are in the capital to press concerned ministries to take appropriate action. 

Speaking with Republica, Meena Pokhrel Upreti, deputy mayor of Mechinagar Municipality, stated that the team has asked the Ministry of Finance to press the group to pay its dues immediately. In return, the ministry has pledged to take immediate action to collect the tax overdues. 

The Sanghai Group stands as one of Nepal's major business powerhouses. 

While the common people are obliged to pay all taxes and fees without delay, such big houses are usually allowed to get away with it. While it has attracted harsh criticism from the people, the government has failed to coerce the group to pay taxes immediately. 

Meanwhile, since the NTDC has shares of the government as well, the Sanghai Group has tried to justify the unpaid taxes stating that they are not liable to pay taxes, claiming that the Local Self Governance Regulation 2055 BS has a provision for exempting firms with government investment from paying unified property tax.

However, elected officials of the municipality have argued that the legal complications regarding the issue needed to be cleared first. 

A case similar to the one at hand is that of Rs 17.5 million combined tax overdue of Himalaya Mahalaxmi Tea Garden and the mini-palace that lies within its premises of Damak Municipality. However, the owner of this tea garden, former king Gyanendra Shah has shown no interest on clearing this tax due.

Despite written notices of the municipality time and again, the NTDC has been dilly-dallying and trying to avoid the matter, according to the officials of Mechinagar Municipality. According to the municipality records, the NTDC has not submitted its taxes since the Fiscal Year 1995/96. The NTDC consists of 35 percent investment of Sanghai Group and 35 percent of the government. 

According to NTDC official Subas Sanghai, over 496 bigha of land at Mechinagar Municipality was leased to the Sanghai Group by the government for 50 years, nearly two decades ago, to run tea garden.

While the mayor of Mechinagar Municipality Bimal Acharya stated that they would collect the taxes by any means, the NTDC has refrained paying, citing legal provisions. 

According to the regulation of the municipality, for property whose value exceeds Rs 500 million, the owner is liable to pay two percent unified property tax.

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