Business community's shame

The Inland Revenue Department (RID) has unearthed tax evasion and false tax refund claims on a shocking scale by Nepal’s business community. What makes this tax evasion so serious is not just the sheer size of it but also the number of business houses involved in the malpractice. RID officials say that they have so far established the involvement of 20 firms belonging to almost all the major business houses, and the evasion of as much as 10 billion rupees in tax.



These firms have evaded Value Added Tax (VAT) by issuing fake VAT bills, and as if this was not grave enough some of them have also claimed VAT refund through the submission of fake documents. Obtaining VAT refund on the basis of fake documents is the most serious financial crime any business firm can perpetrate against the state.



The government must take strong action against such crime and expose the business houses involved. RID has already slapped 1.35 billion rupees in tax and fines on the 20 firms, but we think this penalty does not match the seriousness of the crime they have committed. Common sense says that at least some of the proprietors of the firms should end up behind bars. At the same time, the government and its agencies have so far shied away from making public the names of the firms. They argue that they are protecting their identities since they are obliged to “protect taxpayers’ rights”. We disagree. These are tax evaders, not tax payers. These are financial criminals. They should be exposed and punitive action taken against them.



We have a piece of advice for the business community, which often assumes the moral high ground and loves to slam politicians for corruption and opportunism. We haven’t heard any comment from any business house or for that matter from the representative bodies of the business community—Federation of Nepalese Chambers of Commerce and Industry and Confederation of Nepalese Industries—on this tax evasion scandal.



The major business houses have a responsibility to come clean and tell the public whether they are involved in the shameful misdeed. Instead, what the businessmen are doing now is ganging up against some honest bureaucrats and tax officials and lobbying hard with the politicians to get them removed or at least transferred from their posts so that the ongoing probe against the tax evasion dies a premature death. And they have paid some third-rate journalists and newspapers to write against these officials and slander them. We wish to warn the business community that we are watching all this very carefully, and we ask them to stop such character assassination immediately.

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Shame! Shame! Shame! Shame on Nepal