16 banks filed a writ in the Supreme Court against the government
Kathmandu. More than a dozen commercial banks have filed a petition in the Supreme Court against the provisions of the Economic Act 2080, which imposes tax on FPO’s premium and ‘bargain purchase gain’ of mergers and acquisitions.
16 commercial banks have filed a petition in the Supreme Court, opposing the Office of the Prime Minister and the Council of Ministers, the Ministry of Finance, the Government of Nepal, the Department of Internal Revenue and the Federal Parliament, demanding the repeal of the provisions contained in Sections 26 and 27 of the Economic Act 2080.
In section 26 of the Economic Act 2080, the dividend amount distributed as bonus shares to the beneficiaries up to the financial year 2078/79 out of the amount obtained by issuing shares at a premium price from the Further Public Offering (FPO) according to subsection (3) of section 56 of the Income Tax Act 2058 It has been mentioned that if the tax is included in the income and not filed, then if the tax is filed before the end of December 2080, the fee and interest will be waived.
In Section 27 of the same Act, if the income received from the profit (bargain purchase gain) received during the merger or acquisition (merger or acquisition) is not included in the income for tax purposes, if the tax is not filed, the tax on such income up to the financial year 2078/79 will be charged on December 2080. It is mentioned that if it is filed before the end of the month, the fee and interest will be waived.
The hearing on the 10th has been fixed for the writ petition, which was submitted to the Supreme Court on 29 August and registered on Friday.
Citizens Bank, NMB Bank, Nabil Bank and Nepal Investment Mega Bank have filed writs in both cases of merger and acquisition bargain purchase gain and FPO premium, while Sanima Bank, Siddharth Bank, NIC Asia Bank, Kumari Bank, Himalayan Bank, Prime Commercial Bank, Prabhu Bank, Global IME Bank, Lakshmi Sunrise Bank and Machhapuchhre Bank have gone to court against the policy to levy tax on bargain purchase gains of merger acquisitions.
The Revenue Investigation Department started an investigation into the issue of tax evasion, which has been continuously mentioned in the report of the Auditor General’s office for some years. The Revenue Investigation Department started an investigation into income tax evasion from Nepal Investment Bank as it was found that while distributing dividends as bonus shares out of the share premium amount, they presented their accounts without calculating the income and income tax expenses as per the provisions of the Income Tax Act, 2058.