While the anti-corruption drive appears to have picked up some speed in recent months, governance practices and policy making processes appear to indicate a process of de-democratization.
The Supreme Court’s verdict capital gains tax during the transfer of Ncell’s ownership has been lauded by Nepali people, but the complicity in tax administration and complexities of international financial flows continue to pose serious challenges to good governance in Nepal.
Ncell’s case shows that foreign direct investment in Nepal comes through multiple offshore accounts and tax havens and it is difficult to ensure taxation, control money laundering, and track illicit financial flows. The complicity of politicians and civil servants at the highest levels makes it difficult to ensure that amoral actors do not steal from the Nepali state and the people.
As Financial Action Task Force (FATF) resumes Nepal’s compliance to its recommendations, the Finance Ministry has formed a sub-committee to look into Center for Investigative Journalism’s report on Nepal on people engaged in tax havens abroad. This and other moves, especially by CIAA, appear as window dressing to hide and protect the operations of a much more sinister kleptocratic network.
The process of de-democratization is also highlighted by the fact that Dr. Govinda K.C.’s demands to ensure people’s access to quality health services and quality education are undermined by the operations of shady partnership between the political parties and their financiers. Nepal’s public policy and governance is distorted by the desire for commissions and kickbacks. The examples of NAC, the new railway, Nepal Telecom and Melamchi, shows that public interests are continually undermined by corruption.
Author: Ajaya Bhadra Khanal
Photo: Sushma Bhatta
This article first appeared in The Kathmandu Post on June 17, 2019.