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Incentives, interests​, and conflicts

After stirring debates on its legality and constitutionality, the issue of fiscal incentives is back again.

The government has asked the Anti-Corruption Commission to look into a case of conflict of interest involving the former works and human settlement minister in connection to fiscal incentives the last government granted in 2013. The prime minister’s office alleges the involvement of the former minister in granting incentives worth about Nu 76.88 million that benefitted his daughter, who is the co-owner of the FDI -run Le Meridien.

The former minister is accused of policy corruption, abuse of official power and functions, failure to declare conflict of interest and official misconduct. The government had pointed this out in August last year when it was accused of violating the Constitution by granting fiscal incentives without the Parliament’s approval in January 2016.

The question is why now? While the government has raised an important issue that needs clarity, there is as much a need to assess what kept the government from bringing this issue up today? The government claims that this isn’t a political move but with the country already gearing up for the upcoming elections, this claim appears naïve, even if the government’s commitment to address corruption is sincere.

Conflict of interest is a common denominator of corruption. It exists when an individual or an organisation has the opportunity, real or perceived, to exploit their position for personal or corporate benefit. It becomes corruption when that advantage is used for personal gain and failure to declare conflict of interest is an offence under the ACC Act. It is now for the ACC to determine if the former minister had abused his position. It has stated that it would follow due process as it does with any other corruption complaint.

Since the issue has come up again, it has become imperative for authorities concerned to resolve issues of procedure, legality and corruption in fiscal incentives granted before May 8, 2017. Both the governments granted temporary exemption of taxes and duties to boost private sector development and to attract foreign direct investment (FDI). But it appears that laws were overlooked and beneficiaries of the incentives extended beyond the targeted sector.

The responsibility to inform the people about the details of all companies and individuals that benefitted from fiscal incentives granted is on the government. Being selective of cases it sends to the ACC would not help tackle corruption. The government or agencies concerned must also stop skirting around and bring closure to the legal issues that arose from the earlier fiscal incentives.

Overlooking these practices could set a wrong precedent ; it would be routine for the next government to unearth the previous government’s conducts.

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