The Finance Committee under the Legislature-Parliament on Tuesday directed the government to resolve the issue of double and unnatural taxation imposed by federal, provincial and local governments.

The Finance Committee directed the government after holding a two-day discussion with the officials of Finance Ministry, National Natural Resource and Fiscal Commission (NNRFC), National Planning Commission and Investment Board Nepal (IBN).

“Imposing taxes beyond people’s capacity and taxation by different layer of the government on same financial activities is against the principle of taxation,” the Committee concluded.

The committee said it would study the issue related to the double and unnatural taxation, and direct the Ministry of Finance to play a role of responsible leadership to resolve the problem. The committee would issue another directive to the concerned stakeholders along with the Office of the Prime Minister and Council of Ministers to amend the law if needed.

The committee said that a new provision should be formulated by amending or scrapping the law in coordination with Finance Ministry, National Natural Resource and Fiscal Commission (NNRFC), National Planning Commission and Investment Board Nepal if there is a provision to impose double taxation in the policy, laws, regulations and guidelines.

During the meeting, the committee discussed recent work progress of the government offices.

The committee discussed the issue with Finance Minister YuvarajKhatiwada, Finance Secretary RajanKhanal, Executive Office of the Investment Board Nepal Maha Prasad Adhikari and NNRFC Secretary BaikunthaAryal among other officials.

The committee directed the NNRFC to give full shape by forming Inter-Government Fiscal Commission.

Saying agencies, provinces and local units have been facing problem to iron out the issue of financial conflict due to the failure to give full shape to the officials of NNRFC and Finance Ministry, members of the committee underscored the need of Inter-Government Fiscal Commission.

The Committee has decided to direct the government to form the National Natural Resource and Fiscal Commission as per Article 26 (250) of the constitution and implement it. The Committee has also decided to direct the government to give full shape to the Inter-Government Fiscal Commission as per section 33 of Inter-Government Fiscal Commission-Act 2074 and implement it at the earliest.