Lawmakers on the committee had turned furious when they found half the documents issued by MoF citing provisions of the Value Added Tax Act and Income Tax Act (ITA) that restrict disclosure of taxpayer information.[break]
Even the remaining half neither contained the names of the firms nor infrmation about the extent of their wrongdoing and other details.
“This is an insult to parliament and its committee,” said Dip Kumar Upadhyaya, lawmaker from the Nepali Congress. By not cooperating with the PAC, Deputy Prime Minister and Finance Minister Bharat Mohan Adhikari and MoF staff were trying to protect wrongdoers, he said.
“Adhikari, on one hand, says use of fake VAT receipts is a crime as serious as printing counterfeit banknotes, and is, on the other, protecting them. This duplicity is not tolerable,” Upadhyaya added.
Lawmakers further stated that they did not agree with MoF´s plan to let the racketeers go after just slapping tax and fines of Rs 2.5 billion.
“By creating fake transactions they had engaged in forgery. In some cases, firms even forged customs documents and reclaimed VAT that they never paid. These are severe crimes that attract action beyond tax laws,” said Dhan Bahadur Gurung.
Some of the lawmakers even tagged the racketeers as ´criminals´ trying to loot the state coffers. “By trying to protect criminals, MoF officials also are acting like criminals,” he fumed.
Following the heated debate, the PAC instructed MoF to submit a report on all tax-evading firms whose investigation has already been completed. It also asked the ministry to take severe action within 15 days against guilty firms whose investigations have already been completed, and inform PAC of this.
The PAC also asked MoF to take stern action against employees involved in the racket. “Ministry of Finance has also been instructed to inform us on the action it will take against 485 firms on which it has freshly initiated investigations,” said PAC Chairman Ram Krishna Yadav.
The PAC on Sunday asked MoF to furnish details of firms whose investigations are already completed, disclosing names, fines and other action prescribed against them, after lawmakers suspected that the government was trying to exempt them with just fines.
MoF officials had gone into legal provisions on non-disclosure of taxpayer information on Sunday as well, but they had agreed to furnish details after lawmakers pushed for that.
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