" Setting up the TSC to settle tax disputes was not a good practice in the first place "
The Special Court has slapped a nine-year jail sentence on three high-ranking officials along with a fine of Rs 4.10 billion each, in what is one of the biggest high-profile corruption cases in the country.
Those who have been sentenced to nine years in jail are former Director General of the Inland Revenue Department Chudamani Sharma, the then chairman of the Tax Settlement Commission (TSC) Lumba Dhwaj Mahat and commission member Umesh Prasad Dhakal. The trio were convicted in two corruption cases on June 1. Quite contrary to popular belief that only small fry were hounded by the corruption watchdog – the Commission for the Investigation of Abuse of Authority (CIAA) – this time has netted three big fish. The CIAA had filed corruption cases against the trio at the Special Court in July 2017 for allegedly embezzling nearly Rs 11 billion each while serving in the Tax Settlement Commission.
The CIAA had filed the cases after the Auditor General in its 54th audit in April 2017 disclosed that controversial tax exemptions amounting to more than Rs 21 billion were given to different firms by the TSC led by Mahat. The commission was formed in 2015 to decide on taxes worth Rs 30.52 billion, but payable taxes were settled at only Rs 9.54 billion. And even of this amount, the companies have not paid in full, causing a huge loss to the state coffers. Those that benefitted from the tax exemption included companies such as Ncell, liquor companies and firms pocketing the value added tax paid by the customer.
The trio can appeal at the Supreme Court if they feel they have been wrongly convicted in the cases. However, since they have been slapped jail sentences of nine years each, they can only do so from prison. The trio were considered to be highly competent officials, and there are opinions that the judges might have handed down the heavy sentences and fines without properly understanding how the tax settlement works. Secondly, if the TSC office-bearers had exempted taxes in collusion with the business houses and firms, then they must have amassed huge amounts of illegal property. However, there seems to be no proof of them having amassed wealth disproportionate to their income. Thus, could they have acted in good faith while discharging their duties? The very act of setting up the TSC to settle tax disputes with firms and companies was not a good practice. Why would the business houses be asking the government to form such a tax commission if it didn't serve their interest greatly? It is very unfair for a company that pays its taxes regularly or small businesses while you have a commission to settle big taxes for others. This already smacks of mischief on the part of those who decided on setting up the TSC. Actually, the TSC was instituted to settle taxes for firms that had gone bankrupt. However, it has exempted due taxes on companies and firms that were running well and making very good profit, such as distillery companies, Ncell, hotels and construction firms.
Thus, it would be very unfair to convict just the TSC office-bearers for corruption while those responsible for setting up the commission in the first place share no responsibility.
Melting Himalayas
A recent scientific report of ICIMOD (International Centre for Integrated Mountain Development) has revealed an alarming fact that the Himalayan glaciers are melting faster than ever before due to climate change. The Himalayan glaciers feed 10 of the world's most important river systems, including the Ganges, Indus, Yellow River, Mekong and Irrawaddy, and directly or indirectly supply over two billions of people with food, energy, clean water, air and income.
The unprecedented consequences of losing this cryosphere (a frozen zone) are too vast to contemplate, the ICIMOD report has said. All the mountainous countries associated with ICIMOD need to work together at the community level to reduce the impact of the fast-melting Himalayan glaciers. The Himalayan glaciers started melting at a faster rate particularly from 2011 to 2020 compared with the previous decade. Those communities living close to the Hindu Kush Himalaya region need adequate support with better technology so that they can adapt to the changes that have taken place due to climate change.
The report has said that the world has warmed at an average of nearly 1.2 degrees Celsius since the mid- 1800s when the world witnessed the industrial revolution, unleashing a cascade of extreme weather.
A version of this article appears in the print on June 22, 2023, of The Himalayan Times.