The manifest lack of cooperation between the federal and provincial governments is a cause for concern for the future the nascent federal republic. The seven provincial governments think the center, which gets 71 percent of all revenues, is trying to deliberately weaken the provinces. In the absence of laws to properly divide taxing rights between the federal and provincial governments, many provinces have imposed their own taxes to fund themselves.
The federal government says that such arbitrary taxing is ‘unconstitutional’. It has written to provincial governments to roll back new taxes. For instance it had to ask provinces 1, 3 and 4 to discontinue their ‘District Export Tax’ levied on movement of forest, agro and mine products. Province 5 has passed a mandate to impose a tax of between Rs 160 to Rs 320 on Indian vehicles, again by stepping on dicey legal grounds.
While the provinces have in some cases agreed not to impose these taxes, in other cases they have refused to back down. Province 2 Minister for Physical Infrastructure Jitendra Prasad Sonal recently accused the central government of trying to dismantle the federal setup by taking away all the important rights from the provinces. Taxes are in fact just a part of the broader dispute between the different tiers of government.
Province 2 Internal Affairs Minister Gyanendra Kumar Yadav has instructed the chief district officers of the eight districts in the province to issue lineage-based citizenship certificates to those eligible under the Nepal Citizenship Act 2006. But the CDOs could not obey him as there are no requisite laws. No doubt these laws should have been drafted on time by the federal legislature. But it was also wrong of a provincial minister to issue such a directive on citizenship, which falls under the ambit of the federal government.
The transfer of staff is another sticking point. Many civil servants used to serving in Kathmandu are reluctant to go work in provinces. Yet the provincial governments still complain that they cannot choose their own employees. Local governments, too, are forever complaining about lack of laws, manpower and money.
Whatever the filings of the local and provincial governments, the federal-level ministers and bureaucrats are clearly uncomfortable with the idea of decentralization of power and resources away from Kathmandu. This unitary mindset must change, and soon, if the federal formula in Nepal is to succeed.
Sept. 29, 2023, 8:06 a.m.
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