Although OAG underlines financial irregularities in government offices in its annual report every year, its recommendations are barely put into actions
KATHMANDU, June 4: At a time when the tax authorities have been moving at a snail’s pace to recover the government’s outstanding dues, the Supreme Court (SC) has issued a verdict asking them to take into immediate action the recommendation forwarded by the Office of the Auditor General (OAG).
Publishing a full text of the verdict issued on January 4, 2024, the SC has asked the tax authorities to mandatorily implement the recommendation forwarded by the OAG. Pointing out the OAG as a constitutional organ, the apex court has stated that the report published by it becomes a mandatory order for the government offices to enforce in their system.
"Tax Settlement Commission itself was against law"
Every year, the OAG publishes its annual report pointing out the flaws in the financial transactions carried out by the government offices. “The report is a manifesto for maintaining fiscal discipline in the bureaucratic system, therefore it should be taken seriously by the government offices,” reads the SC’s verdict.
In regard to the apathy in recovery of the taxes, the 61st annual report of the OAG unveiled last week also pointed out the weak role of the Ministry of Finance (MoF). While a large amount of revenue dues has remained under purview of the Revenue Tribunal, the MoF has been found not enforcing any effective measure to recover the dues that are not subjected to any controversies.
According to the report of the Inland Revenue Department, the government is yet to recover total dues of more than Rs 258.85 billion as of now. The amount includes outstanding dues of Rs 187.10 billion in income tax, Rs 65.76 billion in value added tax, Rs 4.75 billion in excise duty and Rs 1.23 billion under ‘other’ heading. Of the total amount, taxpayers liable to clear Rs 145.77 billion (56.32 percent) have appealed to the Revenue Tribunal.
The apathy of the government offices to enforce the OAG’s recommendation is also revealed in the arrear amount that is escalating every year. According to the OAG’s 61st annual report, the government’s arrears increased by Rs 95.60 billion in the fiscal year 2022/23, while taking the total arrears to Rs 669 billion as of now.
The MoF alone accounted for the largest amount of arrears among the government ministries during the last fiscal year. Out of the total arrears of Rs 46.53 billion of the federal government’s ministries last year, the MoF accounted for Rs 25.47 billion (54.74 percent).
The Ministry of Physical Infrastructure and Transport stood second among the ministries having the highest amount of arrears. The ministry’s arrears stood at Rs 12 billion, up from Rs 8.79 billion in the previous fiscal year.
The OAG in its report has even questioned the MoF and its related offices for not recovering revenue dues, and principal amount and interests of the loans provided to various government entities worth Rs 415.03 billion. The constitutional organ has also expressed its dissatisfaction for making just a ritual without an effective discussion of its recommendations at the federal parliament.
