Former prime minister and convener of Naya Shakti Nepal Baburam Bhattarai has claimed that efforts are on to depict federalism as a failure pointing at the terror of tax.
Speaking in the meeting of Finance Committee of the House of Representatives (HoR) on Tuesday, he attributed the malpractices in levying of tax to lack of Finance Commission and urged the government to form one soon. He stated that there is duplicity in some taxes due to lack of experience and practice, and added that solution should be sought through the Finance Commission.
"The problem is at the source and it should be resolved by forming the Finance Commission. Anti-federalists have started to paint federalism as failure due to that. Only the commission can dispel confusions about taxes," Bhattarai, who is also a former finance minister, said.
Former finance minister and Nepali Congress (NC) lawmaker Gyanendra Bahadur Karki took exception to the rising tax burden on the people, and accused the local elected representatives of increasing facilities for themselves by levying tax. "The government must pay attention toward immediately ending the malpractices of levying tax," he stated.
He pointed that the government has been expanding the scope of tax instead of expanding that of revenues. "What is the purpose of collecting tax? What are the grounds? Is tax being levied only for salary and allowances?" Karki questioned. "The government has aimed prosperity. But business environment has been deteriorating due to malpractices. The government has not paid attention," he added.
Speaking after listening to his two predecessors Finance Minister Yuba Raj Khatiwada conceded that there have been lack of clarity and confusions as it is the first month of the first year of implementation of fiscal federalism. Stating that the constitution has already clarified about the rights of the three levels of government about tax, he added that solution will be sought through inter-government finance council.
Finance Secretary Rajan Khanal stated that the current problem is higher rate of tax rather than areas of tax. "The current problem has arisen due to lack of knowledge and experience about tax in the local governments. We have been making efforts through the administrative sector to resolve that. Solution to this should also be sought at the political level," he argued.
There has been wide-spread criticism of the local bodies recently for arbitrary levying of taxes.
