Kathmandu, April 27

The Public Accounts Committee (PAC) of the Legislature-Parliament, today, asked the Ministry of Finance (MoF) to furnish the report of the Tax Settlement Commission (TSC), 2071, to the committee within 15 days.

Citing that the TSC has exempted huge taxes for different businesses in the name of tax settlement, the committee sought the TSC report from MoF within two weeks. The TSC report is considered a confidential government document.

The government had formed TSC in 2015, headed by Chartered Accountant Lumba Dhwaj Mahat, to settle various pending tax disputes. Chartered Accountant Umesh Dhakal and the Director General of the Inland Revenue Department (IRD) Chudamani Sharma were the two other members of TSC, which was dissolved after submitting its report in December, 2015.

The TSC had settled only 1,069 applications out of the 1,726 applications that it had received on long-pending tax disputes. Though the TSC had received applications to settle pending taxes worth

Rs 30.5 billion, the Commission had recovered taxes worth only Rs 9.5 billion from businesses whose taxes had been pending since long.

The PAC meeting today raised questions on why the TSC had been able to recover only Rs 9.5 billion. Moreover, lawmakers also charged TSC members for exempting big businesses from paying taxes for mutual benefit.

“The commission seems to have settled taxes from only small businesses and have exempted taxes for big ones,” lawmaker Ramhari Khatiwada said. “The fact that the Commission has been able to recover only a small amount of applicable taxes hints to the fact that the then TSC had used its discretion to exempt taxes of many businesses.”

Though the Tax Settlement Commission Act, 2033, has mandated the Commission to settle pending taxes through negotiations and analysis, a majority of lawmakers at the meeting were of the view that the TSC had misused this provision and collected fewer taxes than it actually could have.

PAC had summoned all the three members of the then TSC today to discuss on such allegations. However, as lawmakers were not satisfied with the clarifications that the three members provided it has asked MoF to submit the TSC report within two weeks.

Lawmaker Dhanraj Gurung charged that the TSC had exempted a large amount of taxes for private businesses which resulted in low recovery of pending-taxes. “The government and TSC members should provide details to PAC on the amount of tax that the Commission exempted for each firm including the nature and financial position of businesses that were exempted from the tax,” he said.

The then chairman of TSC, Mahat, informed that the amount of pending taxes that TSC recovered seems low as the number of applications seeking tax settlement were of such a nature that they did not fall

under the jurisdiction of TSC. Similarly, IRD Director General and then TSC member Sharma stated that TSC’s activities had been fair and unbiased.

The TSC that was established in 2015 was the seventh such commission formed by the government. Such commissions were earlier formed in 1980, 1986, 1992, 1996, 2001 and 2007.

Ncell CGT case details sought

KATHMANDU: The meeting of the Public Accounts Committee (PAC) of the Legislature-Parliament, on Thursday, decided to seek a report on the progress made by the government in determining and collecting applicable capital gains tax (CGT) from Ncell in the TeliaSonera-Axiata deal as the government has missed the PAC-given deadline. Due to the delay by the government to collect applicable taxes from the Ncell purchase deal, PAC on January 15, had directed the Ministry of Finance (MoF) to finalise and collect related dues from Ncell within three months. “Officials of MoF and Inland Revenue Department have been making no headway in the Ncell deal despite repeated directives of PAC. If these government bodies yet again fail to determine and collect applicable taxes from Ncell, PAC needs to take action against these government officials,” lawmaker Bikash Lamsal said. — HNS