Probe committee recommends action against Sebon chair

The probe committee has recommend government to take action against chair of the Securities Board of Nepal (Sebon) Bhisma Raj Dhungana. The committee reported that Sebon chair misused his position to take undue advantage.

Submitting its report to the government today former High Court Judge Ananta Raj Dumre, who led the committee, said that the government will do needful as his team has completed its duty. The committee handed the investigation report to finance minister Janardan Sharma at a programme organised at the Finance Ministry.

The cabinet had formed the committee on September 1 to investigate the allegations against Sebon chair Dhungana.  It was asked to submit its report within 15 days.

Receiving the report, finance minister Sharma said that the government will take necessary decision after studying it. He also vowed to protect interests of all investors in the capital market.

The Sebon chair Dhungana and Nepal Stock Exchange (Nepse) chief executive officer (CEO) Chandra Singh Saud have been blamed for taking golden shares of the Sarbottam Cement -- that is preparing to issue public share through book-building process -- in the name of daughter and wife.

The Public Accounts Committee (PAC), under the parliament had summoned the both and directed the government to take action against both of them on the allegation. Likewise, Earlier On August 20, the Finance Committee also had decided to take action against Sebon chair and Nepse CEO Saud for taking unfair advantage of their position while purchasing the shares.

The Finance Ministry had also sought clarification from both of them.
On August 24, Saud has resigned claiming that he has not misused his position, while buying Sarbottam Cement share in the name of his wife.

PAC directs to recover dues of dedicated feeders and trunk lines

The parliamentary Public Accounts Committee (PAC) has directed the government to recover billions due of dedicated feeders and trunk lines -- from the industries -- after Nepal Electricity Authority (NEA) failed to take action against them.

A meeting of the mini parliament today, validating the study report of its sub-committee, also asked the government to recover the dues within a month.

In July 2019, the PAC had formed a five-member sub-committee led by Nepali Congress (NC) leader Minendra Rijal to study the issues of controversy on whether it is legitimate to charge the industries with the premium charges or not. The sub-committee has sorted out Rs 14.08 billion dues of the industries for the use of dedicated feeders and trunk lines.

The NEA supplied electricity to around 300 industries under the special facility -- as dedicated and trunk lines -- even when the country was reeling under up to 18 hours of load-shedding. The NEA had imposed 65 per cent as premium charge for the users of such dedicated and trunk lines. However, the industries refused the premium charge, after the NEA asked them to pay. The NEA has since then repeatedly sent notices to the industrialists asking to settle their electricity dues. Instead of paying their charges, the industrialists went to the Prime Minister asking for waiver of the charges. Due to the private sector's lobbying, a cabinet meeting, last year, even waived the premium charge for eight-and-a-half months of the total dues to minimize excess financial burden on the industrialists. After the cabinet decision, the industrialists now are supposed to settle the dues of only 28 months and 11 days.

But the industrialists have been reluctant to clear their dues, arguing that it is not appropriate for the NEA to levy additional fees even after the power utility announced the end of load-shedding in 2016.

Complaint against health minister Dhakal filed at CIAA

Some activists today filed a complaint against minister for Health and Population Bhanu Bhakta Dhakal at the anti-corruption watch-dog.
‘Enough is Enough’ campaigners have registered a complaint against Dhakal and some other government officials at the Commission for the Investigation of Abuse of Authority (CIAA) for their allegedly involvement in embezzling state funds while procuring medical equipment amid the battle against the Covid-19 pandemic.
In the complaint registered at the CIAA today afternoon, they have demanded an investigation into the alleged corruption in the medical equipment procurement.
They have also sought investigation against secretary at the Ministry of Health Laxman Aryal, director general at the Department of Health Dipendra Raman Singh, owner of the Omni Group Durga Prasad Belwase, Bhanu Bhakta Bhattarai and Chief Executive Officer (CEO) of the Omni Group Tulhari Singh Bhusal.
In their complaint, the activists have categorically claimed that the alleged corruption took place in collusion with deputy prime minister Ishwar Pokharel, Prime Minister's chief political advisor Bishnu Rimal, former health secretary Yadav Koirala and former director general of the Department of Health Mahendra Shrestha. Incumbent secretary Aryal has been transferred to the Health Ministry after the infamous Omni-episode that has
Earlier, ‘Enough is Enough’ campaigners had sought information from the Health Ministry regarding the government's expenses in the battle against the Covid-19 pandemic by using the Right to Information (RTI).
The government had bypassed minimum quotation and purchased medical equipment and kits at high rate from Omni Group raising many eyebrows and made the entire procurement process suspicious. Likewise, it was revealed that coronavirus test kits worth almost Rs 70 million that the government purchased from China did not meet the World Health Organisation (WHO) standards.
After pressure from public, the Public Procurement Monitoring Office has sought clarification from Omni Group as to why it should not be blacklisted, as recommended by the Department of Health Services, for the alleged irregularities in the procurement and supply of medical goods for the Covid-19 emergency.
One month ago, on June 23 the parliamentary Public Accounts Committee (PAC) has opened a formal investigation into alleged corruption over allegations that government officials procured essential medicines and health products at inflated prices, taking undue advantage of the Covid-19 pandemic. But the mini parliament’s probe has not moved ahead since a month as the government of KP Sharma Oli has been protecting corrupt ministers including health minister Dhakal.

Nepal Satellite Telecom’s licence revoked

The license of Nepal Satellite Telecom (NST) has been automatically terminated as it failed to clear outstanding dues by the deadline that was yesterday, according to the Nepal Telecommunications Authority (NTA).
The private telecom company operating under the Hello Nepal brand owes some Rs 799.2 million as of July 16 as royalty, licence renewal fee, frequency fee, service expansion fee and Rural Telecommunication Development Fund (RTDF). But the Nepal Satellite Telecom has failed to clear its dues, despite repeated calls from the telecom regulator.
“The license has been automatically terminated as the company failed to pay its dues within the deadline of August 18,” the NTA informed, adding that the telecom company can, however, appeal within 35 days in regard to the automatic termination of the license, and the court’s verdict will be final in relation to its licence, if it moves to court.
“After a negotiation, the NTA had earlier directed Nepal Satellite Telecom to deposit the first tranche – Rs 70 million – of its dues by August 18 and clear the remainder of the outstanding dues within three months,” the NTA said, adding that the Nepal Satellite Telecom’s licence has been revoked automatically as the telecom service provider failed to deposit the first tranche of its tax dues by yesterday (August 18). “Had the telecom service provider paid the first installment, the company would have gotten an additional three months to clear the rest of its dues.”
Earlier, the telecom regulator asked Nepal Satellite Telecom to deposit its dues by the end of the last fiscal year. Instead of paying, the telecom company moved to the court to cancel the amount payable to NTA and an interim order was duly issued. But the Supreme Court refused to continue the interim order.
After the Supreme Court’s order, the NTA had – on July 22 – also sought a clarification from Nepal Satellite Telecom asking why its licence should not be revoked, to which the telecom company responded with a bargain that it would clear the dues, if it was allowed to expand its services in Kathmandu.
The NTA board meeting on August 3, however, directed the company to pay Rs 70 million – the first installment – within 15 days and pay the remaining amount within three months. But Nepal Satellite Telecom failed to deposit the Rs 70 million by August 18.
Nepal Satellite Telecom – owned by businessman Ajeya Raj Sumargi – has also been dragged into tax issues, earlier in May too. The Inland Revenue Department (IRD) had directed Nepal Satellite Telecom to pay Rs 4.31 billion capital gains tax (CGT) out of the gains the company made, while transferring 75 per cent of its share to TeliaSonera eight years ago.
Though NTA claimed that it was not in favour of scrapping licences of telecom service providers, they were obliged to scrap the licence as many telecom companies regularly failed to pay their dues by holding on to licences, not expanding telecom services as promised by them, and also not clearing applicable tax dues to the government on time.
But In February, the Public Accounts Committee (PAC) had directed the telecom regulator to recoup the amount and revoke the licences of all operators that failed to pay their dues within a month. Likewise, Finance Committee under the parliament had also instructed the Finance Ministry and Ministry of Communication and Information Technology to do the needful to recover dues from different telecom companies. The committee had even instructed the NTA to scrap their licenses, if they fail to clear their dues in time.
According to the authority, nine telecom service providers including Nepal Satellite Telecom, United Telecom, Smart Telecom, and BroadLink Network have yet to clear Rs 4.31 billion accrued as frequency charges, royalties, and RTDF.
In 2007, Nepal Telecom Authority had issued telecom service licence to Nepal Satellite Telecom that has been providing telecom services to a limited number of customers primarily based in the far-west region, though it had acquired licence to provide telecom services across rural areas. “The company did not expand its telecom services as was promised,” the regulator added.

Arrears of government agencies rise by 36.7 per cent

Though, all arrears donot mean all the public money misused, the government arrears has increased by 36.7 per cent or by over Rs 183 billion in the last fiscal year 2017-18.
According to the 56th annual report of Office of the Auditor General (OAG) – handed over to President Bidhya Devi Bhandari by Auditor General Tankamani Sharma today – the unsettled amount of government agencies including federal government, provincial government offices, local government offices, district coordination committees and other organisations touched Rs 683 billion – till the last fiscal year 2017-18 – which is more than half of the budget for the current fiscal year. "Such arrears stood at Rs 500 billion till 2016-17," the report reveals.
This year, the OAG did auditing of 6,644 offices in the three tiers of the governments. "The total unsettled amount among federal government agencies stood at Rs 106 billion, which is 5.29 per cent of the audited amount of the federal government agencies," according to the report that reveals that arrears among provincial government agencies stood at Rs 190 million, which is 7.25 per cent of the total audited amount of provincial government agencies. "The OAG had carried auditing of government agencies in 747 local units out of 753 units, and local government agencies arrears stood at Rs 24 billion, which is 4.22 per cent of the total audited amount among local government agencies."
The arrears of different district coordination committees (DDCs) and other committees stood at Rs 10 billion.
Though, the Financial Procedures Act clearly directs to settle arrears within 35 days of getting official reminder but some of the government officials never take it seriously. Every year, the OAG produces the report and submits it to the the President within the nine months of the next fiscal year. The President sends the report to the Parliament for discussion and clear the arrears. The annual report is widely discussed in the Parliamentary Accounts Committee (PAC) and some of the amount is also settled. But the PAC also fails to settle all the arrears, which is increasing with every passing year. 

PM confesses: Sugar mills tricked me into restricting imports

Prime Minister KP Sharma Oli today confessed that the sugar mill owners tricked him into restricting imports.
Addressing the 16th annual general meeting (AGM), he also showed his dissatisfaction about how local middlemen escalated sugar prices after the government announced a ban on sugar import to promote local industries and farmers.
The government banned sugar imports – in September 2018 – to promote domestic product after import started to threaten the existence of Nepali sugar industries, according to them. But they started increasing the price once the government banned the imports.   
Until the government banned the sugar, Nepal imported sugar from Pakistan, Brazil and India. The price of sugar imported from Pakistan was Rs 62 per kg, while the sugar imported from Brazil was Rs 60. "As the government banned the import, the local industries and middlemen hiked the sugar price and fostered black marketing,” Oli said, adding that a kg of sugar was sold for as much as Rs 105.
The ban coincided the biggest festival Dashain-Tihar when sugar is on high demand. The operators created created artificial shortage in the market though the Ministry for Industry, Commerce and Supplies claimed of sufficient supply. The ministry had claimed that some 180,000 metric tonnes of sugar is being produced in the country, while the demand is 230,000 metric tonnes.
Venting his ire against sugar mill owners for 'tricking' him, Oli said that the domestic sugar mill owners betrayed him by telling him that their stocks of sugar were so high they would not be able to clear them even in the next year. "They told me that high imports including from Pakistan had created a problem as they were not able to sell at Rs 53 or Rs 54 per kilo, and they requested me to impose the import restriction."
Though the sugar mills committed not to raise the price as a condition for the import restriction, the price went through the roof soon after, he said, "By raising the sugar price exorbitantly and creating an artificial shortage, it was sold at Rs 85 per kilo and even at up to Rs 105. I want to tell you all, stop this type of cheating."
Prime Minister Oli's accusation comes nearly seven months after the decision to import restrictions taken at the behest of sugar mill owners.
After a huge public outrage over the shortage and the artificial price hike on the eve of the festive, the Public Accounts Committee (PAC) instruct the government to intervene in the market and take action against those involved in the artificial price hike.
The PAC, upon the recommendation of its sub-committee, also instructed the Commission for Investigation of Abuse of Authority (CIAA) to investigate into the shortage and price hike but to no conclusion, as the decision was backed by the Prime Minister himself.
Though the country’s executive head warned business community not to take undue advantage of the ‘private sector-friendly nature’ of the government, he had himself directed the ministries to ban the sugar import, after both the industry and finance ministries denied the sugar mill owners request to ban sugar import. The sugar mill owners met Oli in at his official residence in Baluwater to convince him for import ban.

Government forms judicial panel to probe aircraft scam

The government today formed a three-member judicial committee to probe the controversial procurement of two wide-body Airbus aircraft by the Nepal Airlines Corporation (NAC), a day after a sub-committee under the parliamentary Public Accounts Committee (PAC) recommended action against 29 top officials including incumbent tourism minister Rabindra Adhikari.
The sub-committee – led by parliamentarian Rajan KC – under PAC came up with a report concluding that there had been 'corruption' amounting to more than Rs 4.34 billion in the entire aircraft procurement process of the two A330 jets by the NAC and recommended legal action.
The government move has demeaned the anti-graft body CIAA and under valued the sovereign representatives of the people after the government has formed the committee led by former Appellate Court chief judge Gobinda Prasad Parajuli, former Attorney General Narendra Pathak and chartered accountant Madan Sharma. The move could derail independent investigation into the multi-billion-rupee aircraft scam and give impunity to those involved in wide-body aircraft irregularities.
According to communication minister Gokul Baskota, the three-member committee will study the multi-billion scam that is said to be the biggest scam. It has been given 45 days to submit the probe report to the government. "The cabinet formed the commission to look into issues raised over the procurement process according to the Commission of Inquiry Act-1969," said the government spokesperson Baskota in his regular press briefing today.
A sub-committee of the parliamentary PAC led by KC has recommended action against minister Adhikari, former tourism ministers – Jeevan Bahadur Shahi and Jitendra Dev – and secretaries Prem Kumar Rai and Krishna Devkota. The report has concluded embezzlement of Rs 4.35 billion in purchasing wide-body aircraft by Nepal Airlines Corporation (NAC).
Shortly after the parliamentary sub-committee publicised its report, the government had expressed its serious objection. Speaking at a government-sponsored TV programme, Janatasanga Pradhanmanri – PM with the People – yesterday evening Prime Minister KP Sharma Oli has outrightly rejected the report and advocated for forming an ‘independent committee’ to investigate the case. But the PM's move is unconstitutional and unlawful as the report should be forwarded to the CIAA as the constitutional anti graft body has the only right to move forward with the investigation of corrupotion.
Chairman of the Public Account Committee Bharat Kumar Shah said that he failed to see why the government formed the commission when the committee was still working on the matter.
The full meeting of PAC, which is scheduled for tomorrow, is expected to give necessary direction to the government and the CIAA on wide-body aircraft procurement irregularities on the basis of the 58-page investigation report, prepared after a 20-day investigation by the sub-committee. 
The report categorically names NAC managing director Sugat Ratna Kansakar as the kingpin of the corruption. It has also recommended immediate suspension of Kansakar alongside incumbent secretaries Prem Kumar Rai and Krishna Prasad Devkota, and former secretary Shankar Prasad Adhikari, who had acted as the NAC chair in the capacity of the tourism secretary.

Remove import restriction on sugar, if price cannot be controlled: PAC

Quantitative restriction on sugar imports has been hurting both the consumers and sugarcane farmers. Thus, the lawmakers asked the government to either remove import restriction on sugar or control the price. They also concluded that the strong nexus between importers and sugar mills but weak government monitoring is the key reason for the rampant price hike of sugar.
Speaking at a sub-committee under the Public Accounts Committee (PAC) of the Federal Parliament today, Lawmaker Lekh Raj Bhatta said that they have found that the sister concerns of the sugar mills have been importing sugar and are now raising the price of sugar rampantly to take benefit of the restriction on sugar import. The government had imposed quantitative restriction on sugar import after the repeated request of the sugar mills.
The PAC has formed a sub-committee to study pricing, market situation and smooth and quality supply of sugar.
The government has fixed an import quota of 100,000 metric tonnes of sugar for this fiscal year on the request of sugar mill owners, as they had been complaining that the stock of sugar produced by local sugar manufacturers was not finding a market due to cheaper imports. The government currently imposes 30 per cent customs duty and 13 per cent value added tax (VAT) on sugar import. Despite higher taxes the government was finally compelled to impose quantitative restriction on sugar import citing that the sugar manufactured by Nepali sugar mills could not compete with imported sugar.
However, the lawmakers also blamed the government that it has imposed import restriction without enough groundwork like sugar in stock, quantity imported and pricing.
The immature decision of the government has been adversely affecting consumers and sugarcane farmers, as consumers are compelled to pay high prices and cane growers have not been paid their dues.
Though, lawmaker Prem Aale – taking part in the discussion – claimed that sugar mill owners had raised the price of sugar against their commitment to keep the retail price of sugar at Rs 63 per kg, some other lawmakers asked whether there was any agreement on maximum price of sugar with sugar mills before introducing the quantitative restriction.
"The government authorities are also keeping silent," he said, asking the commerce secretary Chandra Kumar Ghimire and industry secretary Yam Kumari Khatiwada to stop the rampant price hike. "If the government cannot control price," he said, asking the secretaries to withdraw import restriction on sugar.
According to Ghimire, the ministry had recommended for quantitative restriction based on the assumption that there is sufficient stock of sugar as the country has stock of 461,000 tonnes of sugar but the monthly demand is around 18,000 to 20,000 tonnes only. "Sugar mills in the country produce 175,000 tonnes in a year and 286,000 tonnes have been imported, so there will be a stock of around 51,600 tonnes of sugar by the end of the fiscal year," he replied.
Likewise, lawmakers at the PAC also suspected the 'financial nexus' between traders, mill owners and government officials. "While fulfilling the demands of sugar mill owners, why did the government not ask them to make a strictly maintain the retail price at a certain level," lawmaker Chanda Choudhary asked.
Following the pressure from the consumers and lawmakers, a cabinet meeting yesterday also formed a committee at the government level, whereas the PAC has already formed a sub-committee that is preparing a report on pricing of sugar, demand and quality supply by holding discussions with a wide range of stakeholders, including ministers, government officials, sugar mill owners, importers, consumer rights activists and retailers, among others, and based on market inspection.
Earlier on Thursday, the PAC meeting had also directed the government to cap the price of sugar at Rs 63 per kg. However, industry minister Matrika Yadav has expressed reservation over the decision of the committee, terming the parliamentary panel’s act of fixing price as ‘impractical’.
The report will be submitted to the chair of the PAC on Thursday, according to lawmakers of the sub-committee. 

World Bank backs NEA solar plant contract

The World Bank (WB) has defended Nepal Electricity Authority’s (NEA) in solar plant case.
Defending the NEA decision to award the contract to install a 25 MW solar plant to a Chinese company, the World Bank has written a letter to the Public Accounts Committee (PAC). PAC has ordered the NEA to scrap the contract with the Raijin Energy Co.
The PAC has also accused the NEA of breaching the Public Procurement Act by hiring Raijin Energy Co but the World Bank – in the letter – said that the NEA had followed the procurement policies and practices adopted by 189 member-governments of the World Bank Group and the funding agreement signed with Nepal.
The NEA – the implementing agency of the World Bank-funded project – had forwarded the letter from the House panel to the multilateral development partner.
The NEA has received the World Bank’s reply in early September and forwarded it to PAC. Currently, the contract with the Chinese firm is in a state of suspension, and the NEA is waiting for the House panel's response.
This is the second time that the World Bank has come forward to defend the NEA. Earlier, the multilateral development partner defended NEA in August after the parliamentary committee directed the NEA to cancel the deal with Raijin Energy Co, and restart the procurement process to appoint a new contractor.
After the House committee’s ruling the World Bank had even hinted at dropping the project as selecting a new contractor would further delay the project, which is already one and a half years behind the schedule.
In February 2015, the World Bank agreed to provide $130 million to the government to build solar stations to supply electricity to the Kathmandu Valley and reduce electricity leakage. Of the money, $37 million had been earmarked for the establishment of solar plants at Devighat and Trishuli in Nuwakot district.
Although construction should have begun within a year of signing the aid agreement, the NEA took two years to award the contract as the contractor selection process became engulfed in controversy.
The controversy began after former NEA managing director Mukesh Raj Kafle unilaterally decided to hire a Chinese company to build the project. The company was later declared ‘technically unqualified’ by a committee comprising international experts.
As a result, new NEA Managing Director Kulman Ghising decided to award the project to Raijin Energy Co.
However, the parliamentary panel directed the NEA to scrap the contract following a complaint that the price of Rs 3.7 billion quoted by Raijin Energy Co was Rs 680 million higher than the rate proposed by the contractor selected by Kafle.

लाभकर 'टेलियाबाटै'

सरकारले एनसेल खरिदबिक्री प्रकरणमा त्यसबापत पुँजीगत लाभकर एनसेल बिक्रेता कम्पनी टेलियाबाटै असुल्ने निर्णय गरेको उपप्रधान तथा अर्थमन्त्री कृष्णबहादुर महराले बताएका छन्। उनका अनुसार सार्वजनिक लेखा समिति र अर्थ समिति निर्णय एवं प्रचलित कानुनकै आधारमा लाभकर तिर्ने दायित्व टेलियाको भएको निर्णय गत बुधबार भएको हो।
अर्थमन्त्री महराले बुधबार लेखा समितिको जेठ १६ र अर्थ समितिको जेठ २१ को निर्णयअनुसार मन्त्रिपरिषद्ले एनसेल खरिदबिक्री प्रकरणमा लाभकर तिर्ने दायित्व टेलियाकै रहेको ठहर गरेको जानकारी दिएका हुन्।

 

• विगतदेखि हालसम्म भएको एनसेलको शेयर खरिद बिक्री र उक्त खरिद बिक्रीमा विक्रेताबाट असुल्न हुनुपर्ने पुजिगत लाभकर वापतको रकम असुल नगर्ने निकाय एवं जिम्मेवार प्रमुखको सन्दर्भमा समेत अनुसन्धान र छानविन गरि तीन महिनाभित्र यस समितिलाई प्रतिवेदन दिन अख्तियार दुरुपयोग अनुसन्धान आयोगलाई लेखि पठाएको

नेपालको कर्पोरेट इतिहासकै सबैभन्दा ठूलो तथा चर्चित एनसेल खरिदबिक्रीमा टेलियाले कर छलेको विषयमा अख्तियार दुरुपयोग अनसुन्धान आयोग भने रहस्यात्मक रुपमा मौन छ। लेखा समितिले विगतदेखि हालसम्म भएको एनसेल सेयर खरिदबिक्री र उक्त खरिदबिक्रीमा बिक्रेताबाट असुल हुनुपर्ने पुँजीगत लाभकरबापतको रकम असुल नगर्ने निकाय एवं जिम्मेवार प्रमुखको सन्दर्भमा समेत अनुसन्धान गरी तीन महिनाभित्र समितिलाई प्रतिवेदन दिन आयोगलाई निर्देशन दिएको थियो।
लेखा समितिले एनसेल खरिदबिक्रीमा नेपालले आयकर र कानुनबमोजिम लाग्ने पुँजीगत लाभकर बिक्रेताबाट यथाशीघ्र असुलउपर गर्न र तत्सम्बन्धमा आवश्यक व्यवस्था गर्न सरकार र सरोकारवाला मातहत निकायलाई निर्देशनसमेत दिएको थियो।सरकारले १० महिनापछि गत बुधबार मात्र मन्त्रिपरिषद्बाट एनसेल बेच्ने स्विडिस कम्पनी टेलियासोनेराबाट नेपाल सरकारले पाउनुपर्ने पुँजीगत लाभकर तिराउने निर्णय गरेको हो। सोहीअनुसार बैठकले लाभकर उठाउन अर्थ मन्त्रालयलाई निर्देशन पनि दिएको छ।यसअघि अन्य संसदीय समितिले पनि लाभकर उठाउन सरकारलाई पटक–पटक निर्देशन दिँदै आएका थिए। तर, विभिन्न समितिले दिएका पटक–पटकका निर्देशन र जनदबाब बढ्दै गएपछि सरकारले पुँजीगत लाभकर बिक्रेताबाट उठाउने निर्णय गरेको हो। एनसेल बिक्रेता टेलियासोनेरा स्विडेनको सार्वजनिक कम्पनी हो।गत वर्ष पुसमा स्विडिस कम्पनी टेलियासोनेरा (हालको टेलिया) ले मलेसियन कम्पनी एक्जियटालाई एनसेल बिक्री गर्दा नेपाल सरकारले पाउनुपर्ने पुँजीगत लाभकर छलेको थियो। झन्डै १ खर्ब ४० अर्ब रुपैयाँमा कारोबार भएको नेपालको सबैभन्दा ठूला कर्पोरेट किनबेचमा दुवै कम्पनी विदेशी भएको र 'अफसोर डिलिङ' भएको भन्दै टेलियासोनेराले पुँजीगत लाभकर तिर्नु नपर्ने भन्दै नेपालबाट बाहिरिएको थियो।नेपाली कर प्रशासनले टेलिया नेपालबाट बाहिरिएपछि मात्रै कर उठाउने प्रक्रिया सुरु गरेको थियो। अख्तियार पनि छानबिनमा उदासीन देखाएको तथा कर उठाउने मौका हुँदाहुँदै आन्तरिक राजस्व विभागका महानिर्देशक चुडामणि शर्माले संसदीय समितिमा उपस्थित भएरै टेलियाले नेपालमा कर तिर्नु नपर्ने बताएर सरकारलाई अर्बौं रुपैयाँ घाटा लगाएका छन्।संसदीय समितिले ठूला करदाता कार्यालय एनसेलसँग कति पुँजीगत लाभकर लिनुपर्ने हो, उक्त रकम स्पष्ट गर्न निर्देशन दिएका थिए। कर कार्यालयले एनसेलबाट कति पुँजीगत लाभ लिनुपर्ने भन्ने हिसाब निकालेको छैन। यता, ठूला करदाता कार्यालयको पटकपटक अनुरोध लत्याउँदै टेलियासोनेराले कर नतिर्ने बताउँदै आएको छ।एनसेल कारोबारमा टेलियासोनेराले आफ्नो स्वामित्वमा रहेको ६०.४ प्रतिशत सेयर एक्जियटालाई र निरज श्रेष्ठका नाममा रहेको २० प्रतिशत सेयर भावना श्रेष्ठलाई बिक्री गरेको थियो। निरजका नाममा रहेको २० प्रतिशत सेयर ४ करोड ८० लाख डलर अर्थात् ४ अर्ब ८० करोड रुपैयाँमा बिक्री गरेको थियो। भाइजर समूहमा बाँकी रहेको १९.६ प्रतिशत सेयर पनि एक्जियटाले लिएको थियो।

 

• एनसेलको खरिदविक्रीमा नेपालको आयकर कानून बमोजिम लाग्ने पुजिगत लाभकर विक्रेताबाट यथाशिघ्र असुल उपर गर्न र तत्सम्बन्धमा आवस्यक ब्यवस्था गर्न नेपाल सरकार (मन्त्री परिषद्), अर्थमन्त्रालय, उद्योग मन्त्रालय, आन्तरिक राजस्व विभाग, कम्पनी रजिष्ट्रारको कार्यालय र नेपाल दूर संचार प्राधिकरणलाई निर्देशन

अहिले एनसेलको सम्पूर्ण सेयर एक्सियटा (८० प्रतिशत) र भावना श्रेष्ठ (२० प्रतिशत) मा छ। कानुनअनुसार विदेशी लगानी भएको कुनै पनि कम्पनीमा नेपाली नागरिकको कम्तीमा २० प्रतिशत सेयर हुनुपर्ने नियम छ।
एनसेलको सञ्चालक टेलिया र एक्जियटाबीच १ खर्ब ४० अर्ब रुपैयाँमा कम्पनी खरिदबिक्री भएकोमा उक्त कारोबारमार्फत करिब ४४ अर्ब ९३ करोड रुपैयाँ लाभकर राज्यले पाउनुपर्ने ठहर गरिएको छ।केही सरकारी अधिकारीसँगको मिलेमतोमा लाभकर नतिरी नेपाल छाडेको टेलियाले नेपालमा सञ्चालन गरे पनि उसले विभिन्न देशमा स्थापित कम्पनी टेलियाले जस्तोसुकै संरचनामार्फत लगानी गरेको भए पनि बेचेको नेपालमा रहेको कम्पनी भएकोले नेपालमा उसले लाभकर तिर्नुपर्नेमा भावनामा बहेर कानुनको गलत व्याख्या गर्दै नेपाल सरकारको लाभकर पाउने अधिकार गुमाउँदा यसले गलत नजिर बस्ने देखिन्छ।टेलिया नेपालमा लाभकर तिर्न अस्वीकार गरेपछि आफ्नै देशमा समेत आलोचित बनेको छ। ठूला करदाता कार्यालयले भने अनुसन्धान गरिरहेको तर टेलियाले नेपालमा कर तिर्न कुनै कानुनी आधार नरहेको जनाएको छ।आयकर ऐन, २०५८ मा लाभकर बिक्रेताले तिर्नुपर्ने स्पष्ट व्यवस्था छ भने विश्वव्यापी मान्यताअनुसार पनि बिक्रेताले नै लाभकर तिर्नुपर्ने व्यवस्था रहेकोमा नागरिकको इमेलको जवाफ लेख्दै टेलियाकी प्रेस अधिकृत जोहने ह्यान्सनले टेलियाले नेपालबाहिर गरिएको खरिदबिक्रीमा नेपालमा लाभकर नलाग्ने आफ्नो कम्पनीको पुरानो अडान परिवर्तन नभएको जनाइन्।

Government delaying action against tax cheaters

Despite clear direction of the Parliamentary Accounts Committee (PAC) to investigate and penalise responsible authorities for not recovering capital gains tax (CGT) from the seller of GSM operator Ncell, concerned authorities, after 10 months of the shares transfer, are arguing on who should pay the CGT.
According to domestic and international laws, the CGT has to be paid by the seller.
Though PAC, on May 29, wrote to the Commission for the Investigation of Abuse of Authority (CIAA) to investigate the transaction from the very beginning and penalise the officials responsible, neither the CIAA nor the government has heeded the PAC directive.
The government could lose the CGT, if the dilemma and misinterpretation of the law continues any further.
Albeit late, the cabinet last week decided to recover capital gains tax (CGT) from the seller ie Swedish telecom operator TeliaSonera on the basis of decision of the Public Accounts Committee (PAC) of May 29 and Finance Committee of June 3.
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around US$ 1.03 billion in April last year. Reynolds Holding was TeliaSonera's wholly-owned subsidiary registered at Saint Kitts and Nevis, a tax haven.
The TeliaSonera had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region. The Swedish firm had sold a 60 per cent stake in Ncell and also dissolved its interest in an additional 20 per cent stake owned by local partner in December 2015. Ncell officially became a part of Axiata Group Bhd on April 12, 2016.
But the Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal.
The largest transaction in Nepali corporate history has been in news – affecting Ncell's plan to rollout 4G services – also due to some of the responsible government officials, including director general of Inland Revenue Department Chudamani Sharma and chief of the Large Tax payers' Office (LTO) Shovakanta Poudel. Sharma has been claiming that TeliaSonera does not need to pay CGT in Nepal, whereas Poudel has not yet calculated how much CGT the government owns to the TeliaSonera, currently Telia.
TeliaSonera has been however claiming that there is no need to pay CGT in Nepal since the transaction had taken place elsewhere. Responding to an email query press officer of TeliaSonera Johanna Hansson said that recent reports in Nepali media do not change TeliaSonera's view on the tax situation. "We are still of the firm belief that Telia should not pay CGT on the international part of the transaction relating to the sale of Ncell," she added.

Cabinet decides to recover CGT from TeliaSonera

Putting an end to a long-running controversy, the government today decided to recover capital gains tax (CGT) from the seller of GSM operator Ncell.
The cabinet meeting held today evening directed the Finance Ministry to recover CGT as per the decision of the Public Accounts Committee (PAC) of May 29 and Finance Committee of June 3 from the seller of Ncell, informed minister for Law and Justice Ajay Shankar Nayak.
The decision means Swedish communication firm, TeliaSonera AB which has been claiming that it did not need to pay any tax to Nepal government, now has to pay CGT to the Nepal government.
Malaysian telecom giant Axiata had bought Reynolds Holding, which held a majority stake in Ncell, from TeliaSonera at around $1.03 billion last April. Reynolds Holding was TeliaSonera’s wholly-owned subsidiary, registered at Saint Kitts and Nevis – a tax haven.
The TeliaSonera AB had sold its entire stakes in Ncell as part of its strategy to exit Asian and former Soviet markets to focus on Europe and its home Nordic region, according to the TeliaSonera.
The Swedish firm had sold a 60 per cent stake in Ncell and also dissolved its interest in an additional 20 per cent stake owned by local partner in December 2015. Ncell officially became a part of Axiata Group Bhd on April 12, 2016.
Both TeliaSonera and Axiata are public companies in their respective countries. The Nepali taxmen started an initiative to tax the transaction only after TeliaSonera exited Nepal raising lots of suspicion that the tax administration played foul by letting TeliaSonera exit the country without paying CGT to the government.
The cabinet today took the decision on the basis of directives issued by the Finance Committee and the PAC as the two parliamentary committees have been regularly asking the government to recover the CGT from the seller of Ncell. As according to the international law and domestic law, the beneficiary or the seller has to pay the CGT.
The largest transaction in Nepali corporate history has been in news – affecting Ncell’s plan to rollout 4G services – also due to some of the responsible government officials, including director general of Inland Revenue Department Chudamani Sharma, who have been saying that TeliaSonera does not need to pay CGT in Nepal. Likewise, TeliaSonera (currently Telia) has also been claiming that there is no need to pay CGT in Nepal since the transaction had taken place outside the country.
However, the house committees had been regularly directing the Large Taxpayers Office (LTO)) to fix the CGT the TeliaSonera owes to the Nepal government. Ncell is one of the largest tax payers in Nepal since last couple of years.

Delay in construction of expressway costing the country Rs 8 billion annually

The government is starting construction of Nepal's first expressway very soon as the delay has been costing the country dearly, according to minister for Physical Infrastructure and Transport Ramesh Lekhak.
Speaking at the meeting of Parliamentary Accounts Committee (PAC) today, Lekhak said that he would forward the proposal to start construction of the Kathmandu-Tarai Expressway in the cabinet very soon.
The delay in construction of the express highway has been costing the country more than Rs 8 billion every year. Due to recurring controversies and delays, the project’s original cost estimate of Rs 56 billion has doubled to Rs 112 billion in seven years, which means the price tag has been swelling by Rs 8 billion annually after adjusting for inflation.
The minister also told the parliamentary committee that the government would set up a special purpose vehicle to build the expressway as per the report of the Study Committee led by National Planning Commission (NPC) vice chair Dr Min Bahadur Shrestha.
The committee led by Shrestha has recommended to the government set up a separate mechanism for construction of the expressway.
He also informed that the ministry is dealing with three processes simultaneously – resource management, procurement model and establishment of a separate mechanism to execute the five-year project in line with the recommendation of a government committee.
“We will soon prepare a project modality and table it at the Cabinet," he said adding that that a separate mechanism would be formed to execute the ‘public expressway’ as it could be a ‘reference document’ to call for bids under the EPC model. "The report will be used as a bill of quantities (BOQ), a document usually used in tendering in construction projects."
However, the Indian firm IL&FS has sought Rs 600 million from the government for the DPR.
The 76-km expressway that connects Kathmandu with Tarai-Madhesh in just an hour can be split into at least two sections to procure contract services, the study committee had suggested, recommending to build the first of its kind of expressway in Engineering Procurement and Construction (EPC) modality to save time and money.
Speaking at the meeting, transport secretary Dhan Bahadur Tamang told the parliamentarian that the 76-km expressway project may go for the EPC model instead of the build own operate transfer (BOOT) model proposed earlier.
The EPC contract binds the contractor to deliver the project at a stipulated time with predetermined price regardless of any increase in cost that the contractor may incur after the contract is signed.
Once the contract for the project is awarded, the contractor will prepare a detailed engineering report which will ascertain the real cost. The IL&FS – in its DPR submitted to the government in 2015 – had estimated Rs 112 billion, whereas a study conducted by the Asian Development Bank (ADB) in 2008 had estimated the project to cost Rs 56 billion. The cost was revised to Rs 96 billion in 2014.
One of the reasons for the project's delay is also the recurring controversies regarding the price tag.
In the meeting too, a number of lawmakers said that the cost estimate for the scheme was unrealistic.
Lawmaker and former finance minister Bishnu Poudel, on the occasion, said the government should agree to the EPC model and invite bids immediately. "We need to prepare a time-bound calendar to successfully execute the project," he said, warning that it will remain a distant dream, otherwise.
The government has recently announced that it will construct the highway by allocating around Rs 20 billion every year for five years.
Poudel also asked the government to immediately start the construction of the highway without further delay according to the previous government's plan. "The previous government had also allocated Rs 10 billion budget for the expressway," he added.
Poudel as the finance minister – in the erstwhile government led by KP Sharma Oli – had allocated Rs 10 billion for the project in the current fiscal year. But the budget has not been spent at all because of the delay in finalising project development and financing modality.
However, the National Pride Project has not been able to spend its budget due to various technical problems including dispute in compensation for land to be acquired for the project.
Kathmandu-Tarai-Madhesh expressway project chief Satyendra Shakya said that the change in construction modality has also delayed the project.
Lawmaker Ramhari Khatiwada said Nepal’s roads were being used as trial and we should be careful on whether the fate of the expressway would be like that of the BP Highway, a section of which crumbled a couple of days ago.
Likewise, the Lawmakers, on the occasion, demanded the government to expedite the construction of Kathmandu-Tarai-Madhesh expressway as it will be a milestone in the country's transportation network and can cut transportation cost, fuel consumption and time taken for transporting goods and traveling significantly that would also strengthen the national unity, the committee opined.
Concluding the meeting PAC chairperson Dor Prasad Upadhyay said the next meeting is expected to discuss the issues of the expressway again and come up with a substantive decision on the matter.

Track to be opened to motor traffic
The Department of Roads said that it was planning to open the track of the proposed Kathmandu-Tarai-Madhesh expressway to motor traffic. Director general of the department Devendra Karki said that they had been conducting repairs at Chhaimale, Dakshinkali and Nijgadh to allow vehicular movement. The Nepal Army started work to open a track in 2009 November as per the government’s instructions. It was completed in 2013.

IRD fails to audit 75pc of 'suspicious' tax fraud cases

The Inland Revenue Department (IRD) has failed to complete a full audit of one-third of 'suspected' tax frauds.

"IRD has started full audit of 11,334 tax payers — carried over from to last fiscal year from a year ago — but it has been able to complete full audit of only 2,942, which is only 25.96 per cent," according to the report of the Auditor General.

"The full audit of the 2,942 tax payers has helped the government mobilise an additional Rs 8.68 billion," the report said, suggesting the IRD to expand the sampling size and accelerate the full audit process of pending files to check revenue leakage.

Generally, a tax payer files tax on self assessment and the IRD, honouring the tax payers’ integrity, accepts it. However, IRD annually cross checks 1.4 per cent of the files — of tax payers — through random sampling on the basis of risk and does desk review. "If there is any suspicion during the desk review, IRD starts a full audit of them," according to an official at IRD.

However, the department has failed to do a full audit of 8,392 tax payers — till last fiscal year — as it is more involved in administrative work rather than concentrating on audit.

"IRD, instead of being involved in administrative work, should focus on tax compliance and audit, which could contribute more to the government coffer," he said, adding that the unproductive administrative staff has to be minimised and channelised to productive work including expansion of the sampling size.

"If the sampling size of the current 1.4 per cent is increased to five per cent, revenue mobilisation will also go up by three times that will help the government mobilise resources for development activities."

The Auditor General's report has also revealed IRD's incompetency. "The IRD has not only failed to complete full audit of samples within time, but also has no concrete basis of sampling," it said, adding that IRD has failed to comply with the Income Tax Act 2058 BS and VAT Act 2052. "Some of the acts of IRD are also against the Interim Constitution 2063 BS."

However, due to the absence of Public Accounts Committee (PAC) after the dissolution of the Parliament on May 27 last year, there is no check and balance mechanism.

During the Local Donor Meeting recently, development partners had suggested the formation of an extraordinary committee to play the role of the PAC — as an interim measure — consisting of qualified personnel to scrutinise accounts and take necessary action until a regular PAC is established.

"The audit observations keep piling up year after year with limited efforts towards institutional public financial management improvements," they had said.

Government claims there will be no plan holiday

Finance minister Shankar Koirala said there will be no plan holiday, assuaging the serious concerns of development partners.
Trying to satisfy development partners — during the Local Donor Meeting here today — regarding their concern on a 'plan holiday' due to the vacant National Planning Commission (NPC) at a crucial time when the third Three Year Interim Plan (2013-16) needs to be finalised, he said the government will appoint planning commission members including the vice chair soon.
The planning commission that remains vacant after vice chair Deependra Bahadur Kshetry and three members resigned on April 22, has not been able to call the meeting of National Development Council that will finalise the draft of the third Three Year Interim Plan.
Koirala, however, asked the development partners — who are waiting for the finalised draft of the plan — to align their respective country strategy papers in line with the government's development map.
Asking the development partners to also follow the Development Cooperation Report (DCR) 2013, which has concluded that foreign aid has been widely fragmented and not aligned to the government's ongoing second Three Year Interim Plan (2010-13), he blamed untimely and low disbursement, lack of effective oversight and low absorptive capacity as the key impediments to effective mobilisation of foreign aid.
"Aid effectiveness is key with accountability," he said, adding that effectiveness of foreign aid is also a concern of development partners that have been helping Nepal for the last six decades.
The development partners, however, asking the government to focus on four key areas as stop-gap measures to continue mutual accountability, transparency and aid effectiveness, asked for an update on the preparation status of the next three-year interim plan.
"The plan will provide the framework for long-term partnership and commitment of development partners, especially in the context of their next country partnership strategies," said World Bank (WB) country manager for Nepal Tahseen Sayed, speaking on behalf of the development partners.
She also asked the government to focus on budget and portfolio management for maximum development results; economic planning and programming; accountability and governance; and Foreign Aid Policy and aid effectiveness. "By adopting the MfDR approach in the plan, with associated results framework, greater harmonisation and alignment will take place," said Sayed, adding that more rapid progress in establishing a medium-term expenditure framework, with stronger linkages to budget allocation and outputs would bring more discipline and better oversight in managing the expenditure programme.
"We have recently seen unprecedented consensus among top political leaders on hydropower development and the government can use the opportunity to take administrative, legislative, and institutional measures to support hydropower development, including mechanisms for meaningful consultations with the local population," she added.
Hailing the release of the Auditor General's report on time, the development partners also asked the government to form an extraordinary committee — as an interim measure — to play the role of Public Accounts Committee (PAC) consisting of qualified personnel to scrutinise accounts and take necessary actions until a regular PAC is established.
On the occasion, they also welcomed and hailed the sharing of contours of the draft Foreign Aid Policy. "We understand that finalising the policy, in consultation with development partners, is a key priority of the government to bring more clarity with regard to foreign aid management," Sayed said.

Accountability Nepal to strengthen capacity of Office of Auditor General

'Accountability Nepal' has been officially launched, here today, aiming at  strengthening the Office of Auditor General.
Experts during the launch of 'Accountability Nepal' shared their ideas on strengthening financial audits, performance audits, and highlighted the efficient management of public resources.
"Effective implementation of the Auditor General's annual report is a must for government accountability," said acting auditor general Bimala Subedi, inaugurating the programme.
Every year, the Office of Auditor General publishes the audit report of government agencies, public entities and local government bodies. "The report is handed over to the head of the state, who then sends it to the Parliament," she said, adding that Public Accounts Committee (PAC), under the Parliament, further scrutinises it for its effective implementation.
"Though effective implementation rests on respective agencies themselves, questionable expenses have been increasing continuously," she added.
Apart from promoting accountability and transparency in public spending, Accountability Nepal aims to improve the quality of audit and its impact within the portals of government and in the broader public sphere, said team leader of Accountability Nepal Anupam Kulshrestha.
Sponsored by Multi Donor Trust Fund, administered by the World Bank, and implemented by Office of Auditor General, the project was started in November 2012, he said, adding that the project will run for 30 months till May 2015. "Cowater International Inc of Canada is serving as project consultant with associates PP Pradhan and Co of Nepal."
The project, a part of the government's Public Financial Management Reform Programme, will also enhance the quality of financial statement audits, upgrade the capacity to conduct performance audits, and enhance the impact of audits.
"It has a target to increase the percentage of financial audits meeting international standards to 70 per cent under the enhancement of quality of financial statement audits," Kulshrestha added. "Likewise, it will help increase the number of in-depth performance audits reported to Parliament annually to three from one on a selected theme, programme, department of the government under upgrading capacity to conduct performance audits."
Similarly, it will give technical support to PAC, enhance audit reporting process, enhance audit follow-up process and software — under enhancing impact of audits — which will help increase percentage of current year audit recommendations implemented to 50 per cent from less than 35 per cent at present, he added.