The trio had failed to perform their duties in good faith and had colluded with the tax payers to serve their personal interest

The Commission for the Investigation of Abuse of Authority (CIAA) on Wednesday filed a charge sheet against three officer-bearers of the now defunct Tax Settlement Commission (TSC) at the Special Court for their involvement in misappropriating tax revenue and giving undue advantage to the tax defaulters involving billions of rupees. Those who have been booked by the anti-graft body for the corruption and ill-intention are TSC's former chairman Lumba Dhwaj Mahat and members Umesh Prasad Dhakal and Chudamani Sharma, who was also the director general of the Department of Revenue Investigation. Sharma also served the commission as its member secretary, who is also facing two other charges of amassing property beyond his known sources of income. This is the second time that the CIAA has lodged a charge-sheet against the accused.

The anti-graft body, in its statement, said the trio committed revenue leakage to the tune of approximately Rs. 1.332 billion by signing tax settlement agreements with the taxpayers with mala fide intention, going against the TSC Act and the notified order published in the Nepal Gazette on February 5, 2015. In the notified order, it was clearly stated that the TSC would not give any exemption on taxes to those individuals and firms that were found to be involved in submitting fake Value Added Tax (VAT) bills. Then finance minister Ram Sharan Mahat had formed the TSC some 7 years ago to settle outstanding income taxes beyond 2058 B.S.

Joint Secretary at the CIAA Narayan Prasad Risal said the trio had gone beyond the jurisdiction set by the notified order and the Act of entering into tax settlement deals with the taxpayers to exempt them of taxes worth Rs 1.0033 billion.

The anti-graft body found that the trio had failed to perform their duties and responsibilities in good faith and had colluded with big tax payers to serve their personal interest.

The trio accused have been charged under Section 7 of the Prevention of Corruption Control Act, seeking a fine equivalent to the amount in question and a jail sentence of 10 years for each. The TSC had realised only Rs 9.54 billion out of the Rs 40.83 billion in dues.

It may be recalled that the Office of the Auditor's General had also found that the accused had committed "irregularities" to the tune of Rs 21 billion while settling the outstanding taxes.

Out of the 1,726 applications filed at the commission, it had settled as many as 1,069 cases, providing tax exemptions of Rs 30.52 billion to the taxpayers. It means around 69 per cent of the revenue was lost from the state coffer due to the mala fide intention of the officials, who were supposed to collect it from those firms that had not paid taxes for several years.

In principle, this commission was formed to realise the maximum amount of taxes. Instead the TSC officials exempted as much as 90 per cent of the tax money to the taxpayers. As the charge-sheet has already been filed at the Special Court, it is now the duty of the court to settle it at the earliest so that the state can raise the lost amount from them. No such commission should be formed in the future to settle outstanding taxes.

Melamchi damage

It is estimated that the flood and landslide caused by the incessant rains last week have caused damage worth about Rs 1 billion to the Melamchi Water Supply Project. Only the main structures, namely the tunnel and headwork, have survived the natural disaster, with construction materials and equipment as well as shelters built for the technicians being washed away by the flood. According to project officials, it is going to take some months to clear the debris at the site and repair the damage done to the structures. This is really bad news for the residents of Kathmandu who were elated to have water by the asking after the project started supplying water two months ago to test its durability.

Now that the damage has been done, it is only prudent that the project start doing what needs to be done on a war footing. Anyway the residents of the capital had been told they would not be getting water from the Melamchi for at least two months beginning June 15 because the technicians would be testing the tunnel for any leakage or damage. So if the debris can be cleared and the damaged structures repaired within the next two months, it would provide great relief to the valley people who are back to water rationing.

A version of this article appears in the print on June 25 2021, of The Himalayan Times.