Financial Federalism is the Pressing Need of the Present Time and Constitution

 

On September 17, 2021, Kathmandu School of Law organized an Online Provincial Level Policy Forum Discussion amongst Provincial Assembly Members, Secretariat Staff and other key Ministry Authorities of Province 1. The program was organized with an objective of holding discussions amongst the key provincial stakeholders on the recently accomplished research findings of  Taxpayers' Perception on Local Taxation and Fees: A Study of Province 1 and also to sensitize them about their pivotal roles on their parts in order to manage taxation policies aligning with the ideologies of the existing Constitution. Chairing the program, Hon. Pradip Kumar Bhandari, Speaker of the Provincial Assembly said that people’s access to information regarding the use of tax collected should be guaranteed and that all three tiers of governance should coordinate while formulating financial laws so as to avoid overlapping problems in taxation. Likewise, Hon. Mohan Kumar Khadka, Chair, Finance Committee argued that though the country has adopted federalism per se, we are yet to introduce and manage financial federalism which he thinks is the key to the success of this new State Structure. However, he also alleged that the provincial assembly members are rendered voiceless and they do not have much to contribute to taxation policies other than approving budget and also that they lack sufficient regulatory laws to supervise existing local taxes. Representing Province 1, Council of Ministers, Minister Bal Bahadur Samsohang, Ministry of Social Development argued that if government services could be enhanced in proportionate to the tax paid to the government, and instead of increasing tax rate, if taxable areas could be widened, taxation would not be perceived as negatively as in the present time.

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