SHARE PRICES GAIN Kathmandu, 19 Feb.: Share price gained 7.51 points when trading opened Tuesday morning after a holiday Monday f democracy day. Commercial bank shares gained but hydro power shares slumped Tuesday. Share prices gained amid efforts to install an election government. Efforts at government change have impacted the share market positively. Nnnn EC PREPARES FOR ELECTION Kathmandu, 19 Feb.:The Election Commission (EC) has prepared a 92-day work plan to hold fresh Constituent Assembly elections in early June, as proposed by a cross-party Taskforce, BHadra Sharma writes in The Kathmandu Post.. Normally, the time required to hold elections is 120 days. However, considering the special situation the country is in, the EC has adjusted the days to hold polls within the scheduled date. The action plan, according to an EC official, will come into operation once the new government clears all constitutional, administrative and logistical hurdles, including the appointment of commissioners to the EC. “The commission is on standby and the action plan for polls is on the table,” said EC Spokesperson Anil Thakur. There are 107 days until June 5, the poll date proposed by the taskforce. The major political parties—the UCPN (Maoist), the Nepali Congress (NC), CPN-UML and the Samyukta Loktantrik Madhesi Morcha—had formed the taskforce on Sunday to iron out differences on government formation and polls. Historically, except for 1979’s national referendum, most polls have been held in either May or November. The two months were possibly chosen for their fair weather patterns, ensuring voter turnout. However, given the recent seasonal changes that have delayed the monsoon in Nepal, late May and early June offer fair weather conditions. “In the last nine years, the monsoon started in Nepal only after June 11,” said former Acting Chief Election Commissioner Neel Kantha Uprety. In the absence of constitutionally-appointed commissioners at the EC, the government secretary has been heading the EC for the last two months. Both the ruling and opposition parties have agreed to re-appoint recently retired acting CEC Uprety and commissioners Dolakh Bahadur Gurung and Ayodhee Prasad Yadav. Over 10.10 million of the 17.6 million total voters registered in the 2008 CA elections, have been registered under the new digital voter registration system. Nnnn IRD SEEKS INCOME SOURCE Kathmandu, 19 Feb.: The Inland Revenue Department (IRD) has directed Inland Revenue Offices (IROs) to seek sources of income for investments made by directors in the form of loans in a company and also determine whether taxes had been paid for the source of such investments, Ashok Thapa writes in The Kathmandu Poist.. After it discovered large amounts allocated under the ‘loan from directors or loan to directors’ heading in some companies’ balance sheets while conducting tax audits, the IRD issued a circular over a month ago, asking the offices under it to determine why such funds were allocated and to recover taxes if they had not been paid. Further, the IRD has directed the offices to recover taxes if the amount received from the directors have not been invested in the company. Provided that any director is found taking loans from their company and interest has not been charged as per the market rate, the IRD directed its offices to not allow the reduction of interest expenditure in the balance sheet for that amount. The private sector, however, expressed strong reservations over the IRD’s circular, claiming that the move is aimed at taking illicit advantage by making unnecessary queries about income sources. They complained that tax officers assigned for tax audits were also seeking to take advantage after the circular was issued. “If the government attempts to know if income sources are legitimate or not, industrialists will be forced to close down their businesses,” said an industrialist affiliated to the Federation of Nepalese Chambers of Commerce and Industry (FNCCI). Enraged with the department’s circular, the FNCCI, the Confederation of Nepalese Industry (CNI) and Contractors’ Association of Nepal, among others, met Finance Minister Barsha Man Pun on Sunday and asked him to take back the circular. During the meeting, the industrialists said that the investment environment will further worsen if sources of income are sought from investments made in the productive sector. They said that the government has not sought legitimacy of income source investment in lavish buildings and high-end vehicles but those who are investing in the productive sector are being victimised. “If this is the case, it will encourage capital flight from the country,” a senior official at the Finance Ministry official quoted an industrialist. The industrialists said that if the government wants them to reveal their sources, it should first introduce a policy of self-declaration of property, and only then impose taxes. Though the budget for the 2011/12 fiscal year had announced the introduction of a Property Tax Act allowing the self-declaration of property, it has not been implemented. However, Ramsharan Pudasaini, deputy director general at the IRD, said that the circular was only meant to check whether taxes had been paid on loans taken or given by the directors as the tendency of such give and take has increased recently. “While making investments in the form of loans, directors have been found to be investing in cash while taking loans from the company. Loans have also been found taken as cheque, which is a bit suspicious,” said Pudasaini. nnnn