About 13 billion rupees tax collection in two days from FPO and Merger Gain after the rejection of Writ

Kathmandu : Due to the policy taken by Finance Minister Dr. Prakash Sharan Mahat, 12.81 billion Rupees of tax has been deposited in the state treasury in two days from the premium of FPO and the bargain purchase gain of merger. According to the Director General of the Internal Revenue Department, Dirgharaj Mainali, the amount was deposited in the state treasury from the premium of FPO and the bargain purchase gain of the merger until 4 o’clock on Friday, 15th of December and Saturday, 16th of December, 2023 A.D. Tax filing time was till 12 pm of 16th of December. Until this day, there was a system to get exemption from the fines.

Since the 57th annual report published by the Auditor General’s Office in 2020 A.D. it has been continuously instructing the government to collect tax evasion on FPO’s premium, merger and acquisition bargain purchase gain and sale of auction shares. However, the Ministry of Finance and Internal Revenue Department have been ignoring the issues raised by the Auditor General’s report.

In the 60th annual report of the Accounts General, the issue of tax collection by the government has been raised. Finance Minister Dr. Prakashsharan Mahat arranged penalty fee and interest will be waived off if the tax on the premiums, mergers and acquisitions of FPOs, bargain purchase gains and sale of auction shares will be paid till mid of November.

Due to the government’s failure to make a timely decision, Dr. Dr. Mahat did it through the Economic Act. However, 16 commercial banks approached the Supreme Court against the decision made by the Finance Minister, saying that the government was trying to impose taxes against the constitution when it was decided to discount the fees and fines.

The state lost billions of revenue when the former finance ministers did not take any decision, however  Dr. Mahat’s decision has made this happen and the money came back to the state’s treasury. If Finance Minister Dr. Mahat did not decide to give concessions and remained silent like previous Finance Ministers then the tendency of constitutional bodies to raise questions and the government to remain silent would have increased. However, Finance Minister Dr. Mahat has collected billions in the state’s treasury by solving the issues raised by the Constitutional Commission with importance.

Finance Minister Dr. Mahat himself had been saying that the government had adopted a policy of tax collection after the constitutional bodies raised questions in various public events. Similarly, Dr. Mahat has been publicly advising the bankers to go to court as there is no possibility of getting back by amending the budget.

Ministry of Finance has given order to deposit such amount till the mid of November, all the banks will not be charged interest and penalty. Therefore, the companies should be able to pay this amount by the mid of November. If the tax is paid before the mid of November then the tax will be paid only on the basis of the profit from merger and acquisition and the profit from share premium whereas they don’t have to pay interest and penalty.

On Thursday, 13th of November, the constitutional bench of Chief Justice Bishambhar Prasad Shrestha, Justices Anand Mohan Bhattarai, Sapna Pradhan Malla, Sushmalata Mathema and Kumar Regmi dismissed the writ.

With the rejection of the writ by the Supreme Court, the Minister of Finance Dr. Mahat’s decision on waiving off the penalty has been held to be in accordance with the law.