The parliamentary Finance Committee on Monday directed the government to initiate process to annul the Tax Settlement Commission (TSC) Act 1976, on the context that the commission formed were found to be involved in embezzling the possible government revenue just to receive the undue personal benefits.

The government had introduced TSC Act 1976 to look after the collection of the tax amount that remained unpaid for a long period. Based on the act, the tax officials used to impose the tax amount on the taxable income of the business enterprises.

The TSC Act has remained almost outdated with the government endorsing the Income Tax Act in 2002. As per the new act, taxpayers can declare the tax amount on their own. However, instead of scrapping the TSC Act, the government has been forming such commissions just to relieve the tax defaulters by imposing very low amount of tax on them.

In over four decades of implementation of the TSC Act, the government has formed 13 such commissions. Of late, the government formed a three-member commission in 2015 led by Chartered Accountant Lumba Dhwoj Mahat. Former director at the Office of the Auditor General Umesh Dhakal and Director General of the Inland Revenue Department Chudamani Sharma were among the members of the commission. The commission was mandated to recover the tax due amounting Rs40 billion.

The parliamentary committee expressed its concern on annulling the TSC Act after the newly made commission has been grilled by Commission for Investigation of Abuse of Authority, on charge of embezzling a huge amount of the government revenue.