E-Passport Printing Project Faces Potential Tax Evasion and Capital Flight

Kathmandu. Facts have emerged that there is a possibility of large-scale tax evasion in the electronic passport (e-passport) printing project, which is linked to Nepal's national identity, citizens' personal data, and extremely sensitive security. The suspicious triangular business relationship between the French company IDEMIA, which obtained the contract, Capital Biz Solution registered in Singapore, and Delta Core Private Limited operating in Nepal has raised suspicions of billions of rupees in losses to the state in this project. This case has also clarified how powerful the influence of intermediaries is in Nepal's public procurement process. This is how tax evasion and capital flight are possible According to international contract procedures and Nepal's Public Procurement Act, foreign companies working in Nepal must transparently disclose their local agents and the commission amounts given to them. Such commissions must come through Nepal's banking system, and the Nepal government can collect taxes according to the rules. However, in this passport printing project, intermediaries have transacted through offshore companies to evade the eyes of Nepal's tax administration and regulatory bodies. A large amount of commission that should have come to Nepal is being paid abroad through a company registered in Singapore instead of bringing it to Nepal. This, on one hand, prevents foreign currency that should enter Nepal from leaving, and on the other hand, the state loses significant revenue it should receive. Network of the same owner, commission in Singapore A meticulous study of the obtained documents and details clearly shows how the same gang, by establishing companies on both sides, is plundering the state treasury. After the French company IDEMIA secured the contract for passport printing, it has been paying a hefty commission to Capital Biz Solution, a company registered in Singapore. According to the data from the company registration regulatory body (ACRA) in Singapore, the owners of that company are 5 Nepali citizens. The most surprising and suspicious thing is that these same 5 Nepali citizens are also directors of Delta Core Private Limited in Nepal. The French company has made this Nepali company, Delta Core, a subcontractor for the maintenance and technical support of the passport project. The hidden agenda is that the Delta Core company in Nepal shows very low income and pays nominal tax in Nepal, while the main portion of the commission is received abroad through Capital Biz Solution in Singapore. Since Capital Biz Solution is not even registered as an official agent of IDEMIA in Nepal, this has become a serious issue of Hundi or money laundering. Information has also reached investigative bodies that the money accumulated in Singapore is being transferred elsewhere through another suspicious entity in Hong Kong. Violation of Nepal's Law This case involves a blatant violation of several legal provisions in Nepal. It has been found that provisions mentioned in laws such as the Foreign Exchange Act, Income Tax Act, and Public Procurement Act have been violated. According to the rules of Nepal Rastra Bank and the Foreign Exchange (Regulation) Act, no Nepali citizen can open a company abroad, operate a bank account, or conduct foreign currency transactions without the prior approval of the central bank. However, here, Nepali citizens themselves are operating a company in Singapore and receiving commissions. Furthermore, receiving commission for work done in Nepal abroad is a serious tax evasion offense according to Nepal's Income Tax Act. On the other hand, the French company IDEMIA, which won the contract, had not submitted a tax clearance certificate in Nepal at the time of bidding, according to sources. Although the bid of a company without tax clearance should have been technically rejected at the outset, the fact that the contract was awarded based on collusion raises suspicions of involvement from high-level political and administrative leadership. Control over other controversial contracts as well This intermediary group, which operates a commission network by establishing parallel companies in Singapore and Nepal, is not limited to the passport project. Sources claim that this group has a syndicate in most of Nepal's large, technical, and controversial contracts. This group is also involved in the contract for billions of embossed number plates, which has been controversial for a long time and is related to vehicle registration. It is said that this group is also behind mysteriously making the company 'Self' the sole contender and awarding it the contract for smart driving licenses and their system management. The specifications were locked in a way that would suit that company. This group is also working as a local agent in Nepal's major electrical transmission line projects associated with multinational companies like Tata and Siemens, not just in information technology. Experts in public procurement say that the same group controlling projects related to the state's highly sensitive data (passports, licenses, vehicles) and hiding its commissions abroad is not just ordinary corruption but a threat to national security. They demand that the Commission for Investigation of Abuse of Authority, the Department of Money Laundering Investigation, Nepal Rastra Bank, and the Public Accounts Committee of Parliament should immediately initiate a thorough investigation into this matter.