Provincial Governments Demand Greater Fiscal and Administrative Authority from Federal Center

Kathmandu. Provincial governments have demanded that the federal government transfer the authority over real estate registration and land fragmentation to them.

During the Inter-Governmental Fiscal Council meeting held at the Ministry of Finance on Thursday, finance ministers from all seven provinces presented this demand to the federal government.

They argued that while real estate registration and land fragmentation are primary sources of provincial revenue, the authority currently rests with the federal government. Representing the collective stance of the provinces, Bagmati Province Minister for Economic Affairs and Planning, Prabhat Tamang, stated that the concentration of these powers at the federal level has stifled provincial revenue growth.

The provinces also demanded an amendment to the Local Government Operation Act, 2074, to ensure local levels transfer 40 percent of revenue collected from natural resources like stone, gravel, and sand to the provincial consolidated fund. Furthermore, they called for the full disbursement of fiscal equalization grants, expressing dissatisfaction with the federal trend of cutting grants and imposing fragmented projects.

Minister Tamang highlighted that while the federal budget has grown from 1.3 trillion to 2.1 trillion, the fiscal equalization grants to provinces have declined from 123 billion to 98 billion. The provinces also requested that traffic fine revenues be deposited into the provincial consolidated fund and demanded full access to the electronic driving license and vehicle registration system.

Suggestion to limit tax exemptions for large cooperatives

Minister Tamang proposed revising registration fee exemptions for cooperatives, suggesting that such benefits should be restricted to agricultural and productive cooperatives rather than large savings and credit institutions. Additionally, the provinces demanded authority over the registration and renewal of adventure tourism agencies and hotels up to three stars, as well as a share of royalties from climbing peaks between 6,000 and 7,000 meters.

The provincial ministers also criticized federal interference in areas like the Liquor Act and called for the immediate transfer of assets and infrastructure from offices devolved to the provinces.