MoF courts controversy once again for using an ‘outsider’ while preparing draft of budget for FY 2023/24

Published On: June 7, 2023 08:30 AM NPT By: Republica  | @RepublicaNepal

Last year, former FinMin Janardan Sharma faced similar allegation while formulating budget .

KATHMANDU, June 7: The Ministry of Finance (MoF) has been dragged into controversy once again for allegedly using an “unauthorized person” to draft the budget for the fiscal year (FY) 2023/24.

This is the second consecutive year that the apex institution, liable to formulate and implement the country’s annual financial plans, has been accused of using outsiders to manipulate tax rates in the budget document. Tax issues are considered very sensitive matters while drafting the budget.

Last year too, the then Finance Minister Janardan Sharma was accused of manipulating tax rates by calling unauthorized persons at the ministry in the middle of the night while preparing the budget for FY 2022/23. The influence of the outsiders was blamed for changing the tax rate to ensure undue benefits to a handful of businessmen, political leaders and a few bureaucrats.

While preparing the budget for the next fiscal year, Finance Minister Prakash Sharan Mahat-led team of the MoF was allegedly found taking help from Ram Krishna Shrestha, a former non-gazette officer at the Department of Customs, on the eve of the budget announcement day on May 29. Shrestha is reported to be a ‘near and dear’ to a number of corporate houses.

Lawmakers in this regard raised the issue at a meeting of the House of Representatives (HoR) on Tuesday, demanding a clarification from the Finance Ministry. The scheduled meeting of the HoR was delayed by two hours after the main opposition party CPN-UML asked for the government’s official statement on this matter.

Rastriya Prajatantra Party Chief Whip Gyan Bahadur Shahi said there were rumors about corruption in the setting and questioned whether an unrelated person was involved in the course of finalizing the Finance Bill on the night of May 28.

Rastriya Swatantra Party's Dr Swarnim Wagle underlined the need of breaking the nexus of policy corruption. He demanded a clear reply from the line minister whether tax rates were changed in a non-transparent way.

This year, the government has been blamed for widely changing the tax rates and tax bases in an unfair manner, in the name of increasing the government’s revenue collection. However, it has not remained untouched from accusations of involvement in policy corruption.   

Finance Minister Mahat however said that the former non-gazetted officer Shrestha was being used for years while drafting the budget. “Shrestha is a capable, expert and honest person who has been involved in the budget formulation process for the past three decades. He is just assigned to type and print the budget draft and has no role in changing the clauses related to the tax system,” Mahat said.

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