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.

 
• government
 
• capital gain tax
 
• cgt
 
• ncell
 
• purchase deal
 
• commitment
 
• pac
 
• finance secretary