Ministry Secretary Highlights Revenue Collection and Legal Ambiguities Contributing to Audit Discrepancies

Kathmandu. Secretary of the Ministry of Land Management, Cooperatives, and Poverty Alleviation, Madan Bhujel, stated that the land ministry's audit discrepancies are more related to the revenue collection process than the expenditure.

On Monday, addressing the Public Accounts Committee, he mentioned that although the ministry collects approximately 50 billion rupees in revenue annually, audit discrepancies have increased due to legal ambiguities concerning income tax, capital gains tax, and land transactions.

He attributed some of the audit discrepancies to the disagreement between the Office of the Auditor General and employees on whether land sales should be considered a business or a household transaction. According to Bhujel, it is difficult to settle audit discrepancies due to a lack of legal clarity regarding the collection of capital gains tax during real estate transactions, tenancy distribution, and compensation distribution. He emphasized the need for policy and legal clarity through coordination with the Inland Revenue Department, the Ministry of Finance, and other bodies.

Secretary Bhujel said, 'This also relates to the issue of capital gains tax. It is mentioned that capital gains tax has not been collected. Some issues are valid. Some issues are also very legally ambiguous. For example, there is still some ambiguity here regarding the collection of capital gains tax on real estate. As per the Land Act, no tax is levied on tenancy distribution. However, during the audit, it is mentioned that this should be collected. Because of this, on one hand, the amount of audit discrepancy is high, and on the other hand, we are in a situation where we cannot settle it. This also needs to be discussed in the meeting of the Public Accounts Committee.'

Secretary Bhujel stated that there is an audit discrepancy of 1.97 billion rupees related to the encroachment of the Dhobi Khola corridor, and policy-level solutions are necessary through the Public Accounts Committee to resolve such issues.

According to him, the audit discrepancies under the former Ministry of Land Management, Cooperatives, and Poverty Alleviation have exceeded 13.24 billion rupees. Out of the total audit discrepancies, 7.12 billion rupees need to be regularized, 6.03 billion rupees need to be recovered, and 125.6 million rupees remain as advance payments. In the current fiscal year, only 361.56 million rupees have been settled, which is only 2.73 percent of the total audit discrepancies, informed Secretary Bhujel.

The highest audit discrepancies are found in the Department of Land Management and Archives and its subordinate Land Revenue and Land Administration Offices. He specifically mentioned high audit discrepancies in the Chabahil, Dillibazar, Lalitpur, Kalanki, Mahottari, Bhaktapur, Belbari, Chitwan, Biratnagar, Parsa, Siraha, and Bara offices. (News Agency Nepal)