Kathmandu, August 14

The Finance Committee of the Federal Parliament today instructed the government to resolve the issue of haphazard taxation by sub-national governments that is beyond their jurisdiction.

The Finance Committee today summoned Finance Minister Yubaraj Khatiwada and secretary of the National Natural Resources and Fiscal Commission to discuss the issues of rampant taxation by sub-national governments and mounting complaints from taxpayers regarding the duplication of taxes at different layers of the government.

In the meeting of the Finance Committee, lawmakers said the NNRFC, which is a vital body for providing effective guidance in the federal system, is yet to take final shape as chairperson and members are yet to be appointed. “The NNRFC has been unable to function in an effective manner due to which multiple problems are emerging in the operation of sub-national governments,” said former prime minister and member of the Finance Committee Baburam Bhattarai. “The constitutional commission is the only body authorised to deal with the issues related to utilisation of natural resources and other fiscal issues.”

The government has yet to recommend the name of four members and chairperson of the commission.  After the recommendation, the nominees will have to go through parliamentary hearing. The House panel today directed NNRFC, Office of the Prime Minister and Council of Ministers, Finance Ministry and National Planning Commission to resolve the issues regarding tax duplication and collection of taxes by sub-national governments exceeding their jurisdiction.

After receiving the Finance Committee’s instruction, Secretary of NNRFC Baikuntha Aryal said  the NNRFC would provide recommendations to the federal government, provincial governments and local governments to resolve the vexing issues and bring reforms to their respective jurisdiction after carrying out field-level study immediately.

The House panel has urged the aforementioned bodies to work in a coordinated manner and to submit the proposal to scrap laws that provide authority to collect the same

taxes at various levels or submit amendment proposal stating that the country’s economy should not be overtaxed.

The same economic activities cannot be taxed at different levels, said the Finance Committee members. “The federal government and NNRFC have to seriously look into the issue of over-taxation.” The House panel has sought a fortnightly progress report on the given instruction from the NNRFC and the Ministry of Finance.