The third week of Asar or first half of July in Nepali calendar occupies a special place because generally during this time the government presents the annual budget for new financial year. Since 2008 when the Maoist-led government had presented the budget, this will be another opportunity for the coalition government to have the budget passed through the session of the parliament. All the political mess impeding the smooth constitution writing and consolidating peace process nevertheless, the Finance Minister has already presented the annual budget. The budget has been widely criticized to be populist and more worryingly it was leaked to the press before presenting to the parliament. Some opposition makers have even demanded the resignation of the Finance Minister on morality ground for failing to maintain the secrecy of the sensitive document law like the budget.
Nepal’s economic survey depicts a gloomy picture of the economic prospects of Nepal. She is most likely to miss the projected GDP growth of 4.3% for the South Asian countries as mentioned in the World Economic Outlook released by the International Monetary Fund and the World Bank on June 11, 2011. The symptoms of Nepalese economy as reflected in production, trade, employment, income generation and distribution etc. are indicating that Nepal is not performing well economically.
For more than a decade the local bodies have not been elected. Accountability is nowhere to be noticed in the villages and municipalities where the civil servants have been forced to take up the roles of people’s representatives. Furthermore, the so-called mechanism devised by successive governments in taking charge of the local government both at the village and the district levels has only benefitted the political activists of the major political parties. Since these self-appointed local level politicians are not answerable to any representative body, the rampant corruption in managing development funds goes uninterrupted. Absence of elected local bodies will also hamper the implementation of the budgeted programmes.
Public fund embezzlement has been a routine affair at almost every village development committee. Even some of the members of the Constituent Assembly have been found corrupt in pocketing the public fund by presenting fake bills. Against such backdrop comes the news that the incumbent Prime Minister, beleaguered though has distributed millions of rupees from the state coffers to his cronies in the name of medical treatment.
Nepal is the only country where political activists get rewarded too often whether by making them immune from legal prosecution even if they commit crimes or providing checks to them who pretend to be sick. It is not uncommon to see the poor patients in the remote areas having to die for not receiving the modest medical treatment i.e. citamols or jeevan jal, among others. The horrifying news of cholera-stricken deaths in the far west Nepal is not old.
If we ask the government why is it not responding to the needs of government hospitals or public schools which are in such dilapidated condition, the prompt reply will be the lack of resources. One wonders how long we Nepalese have to continue suffering being desperate and witness to the institutionalized corruption fueled by the politicians assisted by the high-ranking civil servants. Millions of rupees are misappropriated so often in many government offices when disadvantaged people are deprived of basic necessities.
Fairly speaking not all politicians and the civil servants are tainted so far as the issue of corruption is concerned. The Sudan scandal is slowly unfolding and some of the accused police officials including the former Inspectors-General of Police were sent to jail for failing to deposit the required bail demanded from the Special Court hearing the corruption cases. The Special Court deserves the credit for activism. It has been also reported that they have now deposited the bail amount and have been released though final verdict is eagerly awaited. We hope that all those corrupt even though they might be the ministers and the secretaries will be brought to book as per nation’s laws. Hopefully, if it happens, it will be the first time to see big fish in Nepal denied any immunity of being legally prosecuted convicting them of corruption.
Many of us would be astonished to find that even a prestigious government institution like the Ministry of Foreign Affairs is involved in creating financial mess, where many still aspire to join because of opportunities it offers. Any impartial screening of the perks and facilities provided to Nepal’s so-called diplomats would reveal that it is much more rewarding to be personnel of the Foreign Ministry than any other entity of the government of Nepal.
Even non-gazetted first class clerks equivalent to Nayab Subbas are entitled to foreign allowances, which at the minimum would be close to 1000 USD per month while they are based in the Nepalese missions abroad. Approximately speaking anyone with an ambassadorial rank would fetch up to 6000 USD per month as foreign allowance besides the government salary plus other amenities. Possibly the diplomat assigned to Tokyo gets the highest allowance.
Seen from the prism of diplomats of richer countries who are much more handsomely paid by their governments, Nepalese diplomats may have some room for grumbling. Considering the affordability of a poor country like Nepal what they have been getting right now is no less attractive. Compared to their counterparts in all other government ministries the foreign ministry personnel are receiving not less than 10-15 times more while at diplomatic missions. Moreover, they are offered a number of facilities like free medical treatment for the entire family, foreign allowances for spouses, children and parents, education allowances for school-going children and free accommodation and so on. All these facilities nonetheless, it is difficult to admit that all the Nepalese diplomats have indeed been corruption-free, taking into account the misuse of privileges particularly the foreign allowance of the working spouses either in international organization or in Nepal. Family members of the serving diplomats are entitled to foreign allowance only when they accompany the latter but a thorough screening of this matter would reveal that many of the spouses are still paid the government money when they are not staying with the diplomats on duty. Who is going to unearth such hidden corruption? Will the anti-corruption agency or the Parliamentary Committees be interested to look into such practice?
The government decided to levy the income tax on foreign allowance as all other government personnel in Nepal are required to pay such taxes out of their monthly salary. Despite being mandatory to pay tax no Nepali diplomat complied with government rules. Non-payment of income taxes imposed on foreign allowance resulted in huge arrears attributed to the Ministry of Foreign Affairs. It had crossed the mark of tens of millions of rupees a few years back.
Ultimately in 2063 the government of Late G.P. Koirala exempted all taxes on foreign allowance accumulated till then at the behest of then Chief Secretary, who had been required to pay hefty amount of foreign allowance tax as he had served in Calcutta-based Nepalese Consulate-General in the mid-1990s.
In the aftermath of that exemption decision the government also decided that the Finance Ministry would provide extra funds to the Ministry of Foreign Affairs to assist the personnel pay the taxes. Whether such funds could not be made available remains unascertained, however, the decision to impose tax on foreign allowance is existing.
The most convincing proof in this regard is the estimated 120 million rupees declared to be arrears in the name of Foreign Ministry by government audit. If those earning foreign allowance including the incumbent Foreign Secretary had not been under legal obligation to pay income tax out of their allowance, there would be no arrears (beruju). This is exactly the situation that has prompted the lawful action by Pradeep Kumar Khatiwada, who as a serving envoy to Bangladesh has displayed his moral integrity in paying the government taxes levied on his foreign allowance. He is perhaps the single Nepali diplomat to declare publicly that he stands to his morally-correct decision to pay all the taxes on his foreign allowance despite harassment from the Foreign Ministry.
But the biggest irony is that his tax deposit, a few hundred thousand Nepali Rupees, which is government revenue, has been unlawfully returned to the depositor by the incumbent Foreign Secretary. Here lies the crux of the mystery. Is he doing this to appease all his subordinate colleagues and the serving Ambassadors, who have the obligation to pay foreign allowance tax? He may have his own concerns. As a former diplomat there would be few lakhs of rupees which he understandably owes to the government in the form of foreign allowance tax. Maybe, he wants to make sure that he won’t be asked to pay such money if he can refuse the tax deposit of his colleague from Dhaka, although it is totally in contravention of current financial regulations
Not surprisingly he has been grilled along with his political boss by the Parliamentary Special Hearings Committee. In explaining to the Parliamentary Committee he has admitted that there is ambiguity in the cabinet decision. Even if such ambiguity persists, it is quite unbecoming of him as the chief financial personnel of the ministry he is associated with, to remain spectator doing nothing to remove the ambiguity for years and allow 120 million rupees to pile up as arrears attributable to the organization he leads.
Since the Parliamentary Special Hearings Committee has taken up the above matter with all seriousness, it is hoped that justice will be meted out. There is no reason to prevent a public official to pay tax in compliance with existing government financial regulations. If some people are purposefully trying to mislead the parliament then they, not the law-abiding ambassador, should be legally punished.