"The program is not on the priority list of the new finance minister," said a government source. He told myrepublica.com that the minister had also not given his instructions to the Inland Revenue Department (IRD), even though the latter apprised him that it was in a position to initiate action.
Since assuming office, new FM Surendra Pandey had received numerous calls from the private sector to drop the program, and that may have led him to drop the Maoist scheme. Indeed, during a meeting with businessmen, he had made remarks that he would not irk taxpayers by taking such "unnecessary steps."
"I will study the rationale for the VDIS-action program," he had also told myrepublica.com on the day of his assuming office.
The IRD, on the other hand, which set up a special cell to investigate the cases of tax evasion and land axe against revenue dodgers, has said only that it has, after conducting investigations, sharply narrowed down the list of probable tax evaders.
"We are well in a position to instantly probe some 400 cases of larger tax evasions," said a senior IRD official.
However, since the taking of such action will require strong ownership of the process and patronage from the political leadership, the IRD has maintained silence on the issue, in no small part because of the icy response the finance minister has given the proposal.
IRD Chief Shanta Bahadur Shrestha, however, said that the program has not been pushed onto the sidelines. "Our investigation cell is as active as it was before, and we are ready to swoop down on revenue dodgers," he said . But he did admit that he was yet to receive instructions from Minister Pandey to nab the dodgers.
The former government, led by the UCPN Maoist, had vowed to bring down the axe on tax evaders who had not taken the benefit of the opportunity to legalize their property by paying a 10 percent tax.
The government had activated the IRD, setting up special investigation for action, as soon as the budgetary program of VDIS ended on mid-March 2009.
Only some 4,000 tax payers have taken up the government´s offer, even though the Finance Ministry had estimated that 10,000 people would do so. The scheme had brought undisclosed property worth Rs 15 billion into the tax net and fetched a revenue of Rs 1.50 billion for the government.
Later, the IRD had started investigations into sectors and industries that were identified as "revenue sensitive"´ such as the real estate sector, manpower agencies, commission and consultancy firms, and medical and legal professionals, among others. It had also sent initial enquiry letters to 900 probable tax evaders, ringing alarm bells among revenue dodgers.
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