Tax Rate Was Decided by Authorized People Only: Finance Minister

Minister for Finance Dr. Prakash Sharan Mahat clarified that the decision regarding tax rate was made by the officials as mentioned in the budget formulation guidelines while preparing the budget for the upcoming fiscal year 2023/24.

Responding to the query raised by parliamentarians in today's meeting of the House of Representatives regarding the involvement of unauthorized individuals while preparing the budget, Minister Mahat reiterated the tax rate was made scientifically and was decided by the official people only.

According to him, only authorized persons had convened in a secret room and decided on increasing/decreasing and revising the tax rate. "We have freely taken a decision on the tax rate. The decision was made based on the internal studies and consultations with the stakeholders and Revenue Advisory Committee," the Minister responded.

General deliberation on the estimate of revenue and expenditure for the upcoming fiscal year has begun in the HoR since last Sunday. Finance Minister Mahat presented the budget worth Rs 1.75 trillion for the upcoming fiscal year at the joint meeting of the Federal Parliament on May 29.

The Minister, in today's meeting, stated that he had delivered on the budget transparently and without any influence. "I had pledged to deliver without any influence. I have followed by commitment. I would like to assure you all that I will work diligently as long as I am shouldering this role and responsibility."

He further clarified that Ram Krishna Shrestha was already appointed in the Ministry of Finance before the appointment of Mahat as the Finance Minister and he formally did not have involvement in the decision-making process of the budget.

"Shrestha, whose illustrious career spans over 30 years, was inducted in the MoF due to his skill, experience, and honesty. His duty is to 'enter' into the system whatever decisions we make. We take ownership of what is presented in the budget and there is no involvement of any external individual in the preparation of a budget," asserted the Minister.

Furthermore, Mahat said that he did not know Shrestha, who, according to him, had been working to 'enter' the official decisions on tax rates and amendments.

According to Mahat, middlemen were not given any space while preparing the budget. "We did not allow the middlemen to come close to us while preparing the budget."

As for the revision of the tax rate for electric vehicles (EVs), he said that earlier low custom rate were kept to encourage the usage of EVs and it was necessary to review the rate as it should be made timely.

"There is a huge margin in the sales of the EVs which is shifting to the consumers. If even we consider a discount, there is a condition that the consumers may not avail it. We need to consider this factor. And there are no 'ifs and buts'. The tax rate on the EVs is reviewed and revived which is several times lower than the petroleum-run vehicles," he said.