Kathmandu, December 5

The inter-governmental fiscal council meeting scheduled for Thursday in Kathmandu will discuss issues related to tax collection, revenue sharing and budget formulation at provincial and local levels.

Amid rising tensions on tax collection at provincial and local levels, the federal government is hosting the meeting to discuss contemporary issues on fiscal management with finance ministers of different provinces.

Finance ministers of all seven provinces have arrived in Kathmandu to take part in the meeting. The federal government will raise four agendas during the meeting -- revenue mobilisation at provincial and local levels; budget formulation and endorsement; fiscal authority; and bookkeeping, and human resource management. The meeting is also expected to discuss issues related to budget implementation, resource management, and problems in project implementation at provincial and local levels.

This is the second meeting of the inter-governmental fiscal council, which is headed by the finance minister. The council’s first meeting was held in June.

The provincial governments are planning to raise the issue of policy ambiguity in tax collection at provincial and local levels during tomorrow’s meeting.

“The constitution has given provincial governments the right to collect different taxes. But some of the laws framed by the federal government infringe upon those rights,” said Jhapat Bohara, minister for financial affairs and planning of Sudurpaschim Province.

Following complaints from various quarters that the provincial and the local governments were randomly levying taxes on the public and businesses, the central government in August had bared sub-national governments from imposing those taxes. However, provincial governments have voiced opposition to the federal government’s move stating it violated the constitutional provision. Provincial governments are not happy with this federal government’s move as they say those taxes were major sources of revenue for them.

The Thursday’s meeting between federal and provincial governments will also provide fodder for the Inter-provincial Council meeting which is

being held for the first time on Sunday.

The inter-provincial council is chaired by Prime Minister KP Sharma Oli. The inter-provincial council meeting is being held at a time when provincial governments have complained that the federal government has not provided adequate human resources to them nor framed crucial umbrella laws.