Bijay Gajmer/Republica Prime Minister Pushpa Kamal Dahal during a discussion regarding Ncell tax controversy at the Public Accounts Committee at Singha Durbar on Sunday.
PM, finance minister finger each other for raising issue in cabinet
KATHMANDU, April 9: Only six days remain for the government to collect capital gains tax (CGT) from the Ncell share purchase deal, according to a commitment made by the finance secretary and other officials under his ministry on January 15.
Finance Secretary Shant Raj Subedi and Director General of Inland Revenue Department (IRD) Chudamani Sharma had jointly pledged to parliament's Public Accounts Committee (PAC) to assess the CGT within three months and collect it. The three-month deadline is expiring on Saturday.
Following discussions with Prime Minister Pushpa Kamal Dahal on Sunday on why the Ncell tax issue was brought up in the cabinet, the PAC decided to remind the government officials about their self-declared deadline for collecting the tax, according to the PAC
PAC Chairman Dor Prasad Upadhyaya said, “We have decided to remind Finance Secretary Subedi and others of those commitments by issuing fresh directions.” The issue of collecting the tax from Ncell as per the Income Tax Act was clear enough, he added.
Meanwhile, the PAC has also received a copy of the letter dated March 21 that Finance Secretary Shanta Raj Subedi dispatched to the director general of the IRD asking for an assessment of the tax and its collection within the three-month deadline.
Talking to Republica over the phone, IRD Director General Sharma said the tax assessment process is ongoing but declnied to go into details. He only referred the matter to the Big Taxpayers Office.
The PAC has so far had nine meetings on the CGT issue since May last year and PAC lawmakers are worried that it has yet to be resolved. They criticized PM Dahal for discussing the issue in the cabinet as an attempt to influence the decision and referred to the potential for a big scam. “Failure to collect the tax may be a huge loss for the country as well as a shame,” added Ram Hari Khatiwada, a PAC member.
Who tabled Ncell CGT issue in cabinet remains a mystery
Who tabled the Ncell tax issue in the cabinet is still a mystery. Both PM Dahal and Finance Minister Krishna Bahadur Mahara accepted that the Ncell share purchase deal was discussed in the cabinet after Ncell approached the PM's office with an application. But they pointed figures at each other for raising the issue at the meeting.
At Sunday's PAC meeting Dahal said, “ I forwarded the application to the Finance Ministry and Mahara raised the issue in the cabinet orally after necessary discussions at his ministry.” But Dahal's statement contradicts that of Mahara who briefed the PAC about the cabinet meeting on March 16.
Mahara had said, “The PM had brought the agenda directly to the cabinet based on an application registered by Ncell at the PM's Office.”
At Sunday's meeting, lawmaker Anand Prasad Pokhrel said, “The PM's statement contradicts that of the finance minister regarding who raised the issue in the cabinet.”
PM Dahal made a commitment to collect the tax but his statement about bringing both the seller and the purchaser together in one meeting to sort out the issue drew criticism from the lawmakers. “It's uncalled-for to discuss the matter with them as the PM said it was the task of the tax officer alone to assess and collect the tax,” said Bharat Kumar Sah.
CIAA ignoring PAC over action against officials dillydallying over CGT
The Public Accounts Committee is to summon the Commission for Investigation of Abuse of Authority to quiz it on why it's (PAC's) directions have not been implemented.
The PAC had asked the anti-graft body back in May to probe tax officials and the chief of the department concerned for not showing due deligence in collecting tax on the US $ 1.04 billion Ncell share purchase deal, and take necessary action. But the CIAA has remained silent over the issue and also has not responded to a PAC follow-up letter sent after a PAC meeting on January 15.
The PAC has decided to again remind the CIAA of its directions in May after Sunday's meeting with Prime Minister Pushpa Kamal Dahal. PAC Chairman Dor Prasad Upadhyaya said that they have reminded the CIAA of their letter and will soon summon the anti-graft body.