CIAA intensifies investigation into multi-billion rupee tax scam

Published On: June 14, 2017 08:23 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, June 13: The Commission for the Investigation of Abuse of Authority (CIAA) has intensified its investigation into the multi-billion rupee tax scam involving senior tax officials.

After recording the statement of Inland Revenue Department chief Chudamani Sharma, who is currently in CIAA custody, the anti-graft body has widened its investigation net, bringing two other officials under the scanner. Investigators privy to the development say more individuals including "politicians involved in forming a controversial Tax Fixation Commission (TFC) and controversial tax payers" are likely to be dragged into the scam. 

But the possibility of politicians being dragged into the scam, according to CIAA officials, will largely depend upon the statements made by the accused government officials and the taxpayers concerned.

A senior CIAA source said that the anti-graft body has already issued summons to Lumdhwoj Mahat, chairperson of the TFC, and its member Umesh Dhakal. As both have ignored the summons issued on Sunday, the CIAA is preparing to arrest them issuing separate arrest warrants, according to a source.

After recording IRD chief Sharma"s statement, the CIAA handed over separate letters to Mahat and Dhakal on Sunday asking them to appear before the constitutional body and clarify on the allegations against them. But both Mahat and Dhakal missed the three-day deadline on Tuesday. “The deadline expired today but they did not come in touch with us. The only option left now is to issue arrest warrants and take them into custody,' said the source.

According to CIAA officials, the anti-graft body"s summons were handed over to the family members of Mahat and Dhakal. Dhakal is said to be in Kathmandu while Mahat has already left the country, said CIAA sources citing family members. 

A preliminary investigation carried out by the anti-graft body shows that both Mahat and Dhakal are also responsible for waiving Rs 21 billion in taxes in a questionable manner.

On June 2, the CIAA had arrested IRD chief Sharma on the charge of being involved in corruption while fixing the tax liabilities of large industrial entities. Sharma, who was also a member of the then TSC, which whittled down  tax liabilities amounting to Rs 30.52 billion to Rs 9.54 billion for purportedly resolving disputed tax cases. The commission was formed by the then finance minister Ram Sharan Mahat.

Commenting on the tax settlements, the Office of the Auditor General in a recent annual report questioned the rationale behind the tax waivers. It said that the settlements were not in cases of disputed tax assessment or in cases under review in court but were only instances of taxpayers simply not paying   their tax dues.

Out of 1,726 applications registered at the commission seeking tax waivers in 2071 BS, it whittled down the taxes for 1,069 applications.

Asked about the then finance ministers" involvement in the tax scam, CIAA officials said that many individuals could be dragged into the scam once they go through the entire documents and the statement recording process completes.  'Investigators have just entered into the matters. It seems the investigation is going to be time-taking and more people are likely to be dragged into the scam,' said the source.

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