KATHMANDU: The Nepali Army has sought interest-tax exemption on its Welfare Fund income earned from the deposits in various Banks and Financial Institutions (BFIs).
The Army Welfare Fund is a not-for-profit body dedicated to the welfare of serving and retired military personnel and their dependents, the national force said, requesting the government for total exemption of the currently levied 15 per cent interest-tax.
The government levies five per cent in the capital gain from the saving of BFIs as income tax, whereas it collects 15 per cent from institutions and organisations under the same topic. Chief of the Army Staff Gaurav SJB Rana raised this issue with Prime Minister Sushil Koirala, who is also looking after the Defence portfolio, during the latter’s observation visit to the Army headquarters last month.
Earlier, the NA requested for the same through the Ministry of Defence, which did not make any correspondence in reply. “We have been requesting the MoD for the exemption of interest-tax,” said an official at the NA’s Welfare Fund. Army spokesperson Brigadier General Jagadish Chandra Pokharal said the issue was lately raised at the level of Prime Minister Koirala, when he was on an observation visit to the army headquarters on March 25.
An estimated Rs 25 billion is in the NA’s fund, which is deposited in about six dozen BFIs, including at all commercial banks in the country. As per the Auditor-General’s report, the fund had Rs 23.61 billion cash and additional Rs 2.1 billion as investment in various projects as of mid-July 2013. According to Pokharel, the national force last year paid more than Rs 220 million as income tax to the government from its fund’s earning as interest from BFIs. The fund’s amount has been increasing every year and the total cash-amount is estimated to reach Rs 26 billion by the end of this fiscal.
The fund was created almost 40 years ago, and most of its earning is the amount collected as levy on the perks and allowances of NA personnel deputed in various peacekeeping missions around the globe. The NA levies some 22 per cent on peacekeepers’ earnings. It has been using the money to run welfare projects, including academic and health institutions, building shelters, targeting the incumbent and retired personnel, their dependents and children. “The army itself has been undertaking so many welfare activities that the government should have undertaken,” said Pokharel. “If the income tax is exempted, we will conduct more welfare schemes.”