It is that time of the year again. The last-minute construction spree is underway to make up for chronic underspending of capital expenditure, right ahead of the new budget to be presented in Parliament on 29 May. The paradox is that while the government faces a severe cash crunch due to falling revenue, it spent only one-third of the development budget in the last 10 months of the fiscal year.&nbsp; The new parties in Parliament like the RSP have been trying to shake things up and urge multi-partisan consultations before the budget, but given the obsolete structure and leadership of the parties, not much is expected to change. But there is a strong argument for tax reform since the government faces a major challenge in balancing revenue with expenditure. The previous government’s ban on luxury items to augment depleting foreign reserves post-pandemic and increased bank interest led to the decline of real estate transactions resulting directly in a drop in revenue. But what makes matters worse is that the government has been profligate in spending beyond its means. Salaries, allowances, administrative expenses, grants and loans have all gone up. The government collected Rs756 billion in revenue in the last 10 months against the target of Rs1.4 trillion whereas its expenditure has exceeded Rs1.04 trillion.&nbsp; Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial Taxation is the primary source of income for any government. Contrary to what the wealthiest Nepalis think, the government is not run with their tax money but by what ordinary citizens pay in taxes. &nbsp;While tax evasion concentrates the wealth within the already privileged, the tax the poor pay is not proportional to their earnings. &nbsp; Nepal’s liberal economic policy since 1990 was expected to alleviate the income gap with trickle down effect, but the economic disparity in society is more stark than ever. A 2020 report Equality for Prosperity showed that while the wealthiest 20% of Nepalis own 56.2% of wealth, the poor 20% have only 4.1%. This economic gap is likely to have widened with the current crisis.&nbsp; This income gap is not just in Nepal. Worldwide, a skewed tax system is blamed for rising inequality. A new Oxfam report points out that two-thirds of the wealth that has increased globally after the Covid-19 pandemic is in the hands of the richest 1%. It recommends tax reforms based on wealth accumulation. “Because the tax system is not progressive in Nepal, wealth is piling up in the hands of the rich, while the income of the poor is not increasing,” explains economist Dilliraj Khanal. “We don't have a system of taxing the rich because of policy weakness and dominance of middlemen.”&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/nepals-care-economy">Nepal's care economy</a>, Bina Pradhan  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7.png" data-media-id="editor_2" data-image-id="20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7" data-rendition-name="original" width="741" height="541" loading="lazy" alt="Rich-poor gap graph"> </figure>  Who pays taxes? Two-thirds of the government's annual revenue is collected not from corporations and industry, but from various taxes and revenue paid by the general public. The share of tax on corporate profit is in fact very small.&nbsp; In fiscal year 2021/22, the government collected a total of Rs989.62 billion in revenue. Of this, the income tax paid by businesses from the profits earned through private companies is only 5%. So while income tax did bring in Rs229 billion which is 24% of total revenue collected, this amount is largely from the income tax paid by ordinary citizens on their personal income. The tax paid from the profits of private companies is only Rs47.5 billion. When adding public limited companies (issued shares to the general public) and other types of companies, corporate income tax comes to only about Rs114 billion,which is just 11% of the government’s annual revenue.&nbsp; The government collected Rs314 billion from VAT last year, and this made up about one-third of total government revenue. Similarly, Rs241 billion was collected as customs duty and Rs155 billion as excise. “Society with unequal income and wealth, but equal taxes, burdens the poor and favours the rich, it is a regressive tax system that makes it difficult for the poor to survive,” says Khanal. For example, VAT is the same 13% for all Nepalis – rich and poor. &nbsp; “In essence, five-star hotels in Kathmandu and the poor are both taxed equally for LPG fuel,” he adds. “From a social justice standpoint, taxes must be based on income.” Read also: <a href="https://www.nepalitimes.com/here-now/ground-reality-of-landlessness-in-nepal/" target="_blank">Ground reality of landlessness in Nepal</a>, Rabi Giri Taxation expert Roop Khadka disagrees, saying it is impractical to have a different VAT rate for rich and poor, and even if it was introduced it would be impossible to enforce. Instead, Khadka favours revoking VAT exemption on goods and services consumed by the upper classes, which are worth nearly Rs100 billion per year. Tax evasion by the rich is another problem that needs to be tightened, and collusion between business and politicians means that the government itself abets tax evasion. Real estate speculation has helped select groups in Nepal to become immensely rich immediately, but the government collects a bare minimum in tax from profits made in land transactions. &nbsp; A real estate sale within five years is required to pay 7% of its profit. If the transition happens within 10 years, only 5% of the profit is taxed. This means most of the astronomical profits made in real estate sales in the past years have gone into the pockets of brokers and large landowners. On the other hand, the 60th report of the Auditor General's Office says many evade tax by showing less than the actual value of the property. The VAT bill scandal 10 years ago also revealed the widespread tax evasion by the commercial sector. The politics of patronage means that businesses are now colluding with politicians and bureaucrats to loot the treasury. The Tax Settlement Commission decided to collect Rs9.54 billion from businesses that have not paid tax for a long time, but the Auditor General's Office later revealed that the decision was made in cahoots with the businesses themselves who actually needed to pay Rs30.52 billion. The most egregious and blatant wrongdoing was by former Finance Minister Janardhan Sharma who was making backroom deals with select business groups importing steel rods and electric vehicles so their products got customised tax breaks in the budget last year. The deal cost Sharma his ministership but the unholy nexus between politicians and business continues with impunity.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b.jpg" data-media-id="editor_5" data-image-id="20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b" data-rendition-name="original" width="6124" height="4082" loading="lazy" alt="Kathmandu labourer NT"> <figcaption>Photo: SUMAN NEPALI</figcaption> </figure>  Alternative to the wealth tax In this state, the only sector keeping Nepal’s economy afloat is the estimated $9 billion Nepalis abroad send home every year. Still, Nepal’s debt has reached 43% of GDP, a sharp rise from 28% a decade ago. This will have a direct impact on the tax system. Sooner or later, the government will raise taxes. But for whom?&nbsp; If the status quo continues, and the poor are subjected to more taxes the income gap will widen further, inviting social unrest. Taxation relative to the size of the economy is about 22% in Nepal, one of the highest in South Asia. But for every Rs100 the government receives as revenue, only Rs23 is collected through income tax. The rest is made up of common citizens paying for the consumption of goods and services.&nbsp; All over the world, different levels of income are distinguished and income tax exemption is given to the lowest which is known as a basic exemption. Welfare states also have a weighted system of taxes of the richest that ensures socio-economic equality. But even though there is a flat tax on salary and allowances, windfall profits including from real estate transactions are not taxed properly, leading to a consolidation of wealth among certain groups. Read also: <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide">Nepal's great income divide</a> Experts have proposed wealth-based taxation to reduce the disparity between rich and poor. Economist Keshab Acharya says that the government should levy an inheritance tax on ancestral property to children as is done in the US, Japan and Europe. This encourages entrepreneurship and inspires the new generation to find creative ways to earn money. But the historical distribution of land in Nepal was largely unfair where families close to the ruling class were granted ownership exempt from tax. These assets have been handed down through generations and ownership of a large part of it is still limited to certain families.&nbsp; Historian Mahesh Chandra Regmi in his book Land Ownership in Nepal states that before 1951, more than one-third of the total arable land had been handed down intergenerationally in that manner. An inheritance tax will also reduce corruption because the mentality that wealth should be passed on to children will be weakened if such a tax is implemented. Meanwhile, land prices in Kathmandu skyrocketed thanks to the government. Since the state has spent on infrastructure that led to the rise in value of property, it should get a share of the profits “The government should get the benefit of increased property valuation in the form of taxes which will increase the spending purse for the welfare of the poor,” explains Khanal. Read also: <a href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank">Some are more equal than others</a>, Anil Chitrakar

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Nepal’s tax system widens rich-poor gap

<img width="1050" height="696" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25c89c7e80680e0439dfjpeg.jpg" alt=""/>The Supreme Court’s verdict on Wednesday requiring the Malaysian company Axiata and Ncell Nepal to pay billions capital gains tax on their purchase of Nepal’s largest private telecom provider Ncell will end a <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/06/03/taxing-time-for-ncell/" target="_blank" rel="noopener">controversy</a> that has dragged on for three years, but is expected to further chill <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Nepal’s foreign investment climate</a>.A full bench of the apex court headed by Chief Justice Cholendra Shumsher Rana decided after two days of hearings that Reynolds Holdings Ltd was a shell company and the real owner of <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/05/16/the-tax-in-question/" target="_blank" rel="noopener">Ncell</a> was <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/12/21/axiata-buys-80-stake-in-ncell/comment-page-1/" target="_blank" rel="noopener">Axiata</a>, and it was liable to pay the tax along with Ncell Nepal.Justices Rana, Mira Khadka, Bishwambhar Prasad Shrestha, Ananda Mohan Bhattarai and Tanka Bahadur Moktan were deliberating on a public interest litigation writ filed by former secretary and advocate Dwarika Nath Dhungel and six others that Ncell Nepal and Axiata were responsible to pay capital gains tax when they bought the company from the <a href="http://archive.nepalitimes.com/article/interview/Nepal-very,1104" target="_blank" rel="noopener">Swedish-Finnish telecom company TeliaSonera</a> in 2016.When TeliaSonera sold Reynolds Holdings shares in Ncell to Axiata for over $1 billion, Nepal’s Large Tax-payers’ Office had said Reynolds owed the government Rs35 billion in taxes and demanded it pay the amount and fines to a total of Rs61 billion.Ncell Nepal refused to pay that full amount, and transferred only Rs21 billion capital gains tax. After this, the writ was filed, and the Supreme Court on Wednesday also rejected a case filed by Ncell.The case became controversial after two foreign investors traded ownership of a Nepal-based telecom company. Since TeliaSonera has already left Nepal, the Court found that the buyer is liable to pay capital gains tax if the seller did not.Senior advocate Surendra Bhandari says that it is international practice that the seller has to pay capital gains tax on any sale of assets, but says the Supreme Court is right in assessing that the seller was allowed to leave the country without paying tax and to put the onus on the buyer.Wednesday decision now sets a precedent for the buyer to also be responsible for paying capital gains tax. Officials at the Internal Revenue Service say that although the country’s treasury will benefit from the tax payment, there has been no investigation into why the seller was allowed to get away without paying taxes, and fears that the case will have negative repercussions on future investment.Eighty percent of Ncell’s ownership is with Reylonds Holding registered in the British Virgin Islands and 20% with Niraj Govinda Shrestha. Ncell’s main promoter was Reynolds Holding through TeliaSonera’s office in Norway.According to Nepal’s tax laws, TeliaSonera’s sale of Ncell to Axiata had a capital gains tax liability of Rs35 billion. Axiata had written to the Internal Revenue Office before the sale if it was liable to pay capital gains tax in Nepal, but there was no reply from its director at the time, Chudamani Sharma.After that the tax controversy got mired in politics, with various party leaders and former CIAA chief <a href="https://archive.nepalitimes.com/regular-columns/Legalese/parliament-and-court-plays,822" target="_blank" rel="noopener">Lokman Singh Karki</a> vying for underhand deals that would let the guilty go free. Says advocate Bhandari: “The Supreme Court decision seems to be driven by the logic that any buyer should first inquire about the liabilities of the seller before any purchase.”However, other retired revenue officials say it is unfair to blame Axiata, and ask it to pay capital gains tax that should have been paid by TeliaSonera. He says the really guilty party here are the politicians who allowed TeliaSonera to leave without paying taxes, and this will dim Nepal’s investment climate just before an Investment Summit planned for next month, and after <a href="https://www.nepalitimes.com/here-now/to-davos-with-hammer-and-sickle/" target="_blank" rel="noopener">Prime Minister KP Oli’s visit to Davos</a> with the message that <a href="https://www.nepalitimes.com/editorial/crony-communism/" target="_blank" rel="noopener">Nepal was open for business</a>.The Surpeme Court verdict has also exposed a loophole in Nepal’s tax laws that allows shell companies to get away without paying taxes. TeliaSonera had its dividends frozen in Nepal by the Large Tax-payers’ Office, but the Supreme Court allowed the company to repatriate its profits.   According to the <a href="https://www.nepalitimes.com/latest/nepalis-in-tax-havens-swiss-banks-money-laundering/" target="_blank" rel="noopener">Nepal Leaks exposes</a> by the Centre for Investigative Journalism and the International Consortium of Investigative Journalists, Ncell owners had used the company to launder money as foreign direct investment. Ajeya Raj Sumargi, a businessman close to the former Maoist party and Birendra Mahato of the Federal Socialist Forum Nepal and brother of billionaire overseas Nepali Upendra Mahato were implicated in documents leaked through the Panama Papers about tax havens.The verdict this week opens the door for Nepal to tax FDI that is coming in from offshore tax havens.   Read also: <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Making Nepal FDI friendly,</a> Shyamal K Shrestha<a href="http://archive.nepalitimes.com/news.php?id=962#.XFwMylUzaUk" target="_blank" rel="noopener">Fight for FDI</a>, Ashutosh Tiwari<a href="https://archive.nepalitimes.com/article/from-nepali-press/Ncell-has-complied-to-all-obligations,3047" target="_blank" rel="noopener">"Ncell has obliged to all obligations"</a>

Supreme Court weighs in on Ncell tax dispute

Nepal won the first two matches, clinching the T20 series in the UAE, making history: this is the country’s first ever win, and series win, against a Test-playing country.&nbsp; On Tuesday night, Nepal lost the last game by 10 wickets. The West Indies easily met Nepal’s 122 runs in 19.5 overs. Despite that, Nepal had beaten the two-time T20 World Champions which is currently number 6 in T20 rankings. It is important to note that the West Indies are fielding a significantly weaker and younger team than they could. Caribbean heavy hitters Nicholas Pooran, Andre Russell and Shimron Hetmyer are currently resting or playing in domestic leagues. But that does not take away from the fact that, after two narrow misses against South Africa and Bangladesh at the 2024 T20 World Cup, Nepal has now beaten a Test-Playing nation, and done so convincingly.&nbsp; Nepal won the first match of the series on 27 September by 19 runs. Batting first after winning the toss, Nepal put up 148 for 8 after losing openers Kushal Bhurtel and Aasif Sheikh early.&nbsp; Rohit Paudel’s 38 and Kushal Malla’s 30 steadied the innings, and 148 was a reasonable target to defend on the tricky Sharjah pitch. The young Windies dropped a series of catches.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251001031052_5f24273f6da2f52f6414b7ecc485938a4c726431bfa7c2ba435bded3debe9f5a.jpg" data-media-id="editor_0" data-image-id="20251001031052_5f24273f6da2f52f6414b7ecc485938a4c726431bfa7c2ba435bded3debe9f5a" data-rendition-name="original" width="1440" height="960" loading="lazy" alt="Nepal defeats West Indies NT 1"> </figure>  Nepal’s fielding, in contrast, was excellent as it held the West Indies to 129 for 8. Dipendra Singh Airee and Kushal Bhurtel both had run outs, and the team held on to tricky catches throughout.&nbsp; The last ball of the match, with it already won, saw Bhurtel catch Fabian Allen off of Airee’s bowling, throw the ball in the air before stepping outside the boundary, before jumping back in to complete the catch legally.&nbsp; Head coach Stuart Law, former Australian Cricketer, was pleased with the performance. “We deserved it, we played a really good game of cricket. I thought our fielding in the first 15-17 overs was outstanding,” he said, predicting, “the West Indies will be hurt, they’re a proud nation. They’ll come out red-hot on Monday, so we got to be better than tonight.”&nbsp; Bhurtel was ecstatic at having beaten the two-time T20 World Champions. He pointed to the team’s versatility as a big strength. “We have a lot of players who can both bat and bowl. Gulsan (Jha) and Kushal Malla did not bowl at all, and Lalit (Rajbhansi) did not bowl out all of his overs.” And the team still used seven bowlers.&nbsp; If the first match was a surprise, then the second match was a shock. Nepal put up 173 for 6, with Aasif Sheikh hitting 68 not out and Sundeep Jora 63, the two putting up a hundred run fourth wicket partnership.&nbsp; They then bowled out the West Indies for a humiliating 83, with Mohammad Aadil Alam taking 4 for 24 and Kushal Bhurtel 3 for 16.&nbsp; There was more excellence in the field, with the Nepali team taking seven catches, many of them very tricky ones right on the edge of the ropes. This second win sealed the series victory, also a first for Nepali cricket. The margin of victory and the team’s overall dominance were both very obvious.&nbsp; Nepalis in the UAE showed up at the Sharjah Stadium in full support for the Rhinos, wearing jerseys, flags, and dhaka topis, raucously cheering on the team’s performance.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251001031052_217ceb7078e9c253f8db6fec57911eb8e56822e3fc20d520d39e06f475fd6d65.jpg" data-media-id="editor_1" data-image-id="20251001031052_217ceb7078e9c253f8db6fec57911eb8e56822e3fc20d520d39e06f475fd6d65" data-rendition-name="original" width="1440" height="960" loading="lazy" alt="Nepal defeats West Indies NT 1"> </figure>  Fresh on their minds must have been recent protests back home. The Cricket Association of Nepal dedicated the series to those who lost their lives. Captain Rohit Paudel also dedicated his man of the match award from the first T20 to the 74 people killed last month in Nepal.&nbsp; “Since last one month has not been that great for us, so slowly we are getting better. It is great to give a little happiness to the people of Nepal,” said Paudel.&nbsp; Leg-spinner Sandeep Lamichhane was notably absent from both matches, having excused himself from the squad for personal reasons.&nbsp; “It is what it is,” said coach Law. “we are a very competitive team and someone has to stand up in his place.”&nbsp; The wins also open the possibilities for further series, with countries such as Bangladesh, Pakistan or Zimbabwe.&nbsp; CHASING TESTS  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20251001031048_70fed823c34d91dfefc078cb5786c2ea04ad70387fbf09424a5304b926cc3e3c.jpg" data-media-id="editor_2" data-image-id="20251001031048_70fed823c34d91dfefc078cb5786c2ea04ad70387fbf09424a5304b926cc3e3c" data-rendition-name="original" width="1600" height="995" loading="lazy" alt="Nepal defeats West Indies"> </figure>  In international cricket, a ‘Test-playing nation’ is a country that is authorised to play Test Matches by the central governing body, the International Cricket Council (ICC). Test Matches are the longest format of the sport, lasting up to five days, and are the most prestigious.&nbsp; Currently, this exclusive group is made up of Australia, Bangladesh, England, India, Ireland, New Zealand, Pakistan, South Africa, Sri Lanka, West Indies, Zimbabwe, and Afghanistan.&nbsp; Nepal has a ways to go. To become a Test-playing nation, it must first become a full member of the ICC. To do this, they must consistently qualify for ODI and T20 world cups over eight years, and have at least two ICC-accredited venues for hosting matches — currently only the Tribhuvan University Cricket Ground qualifies.&nbsp; Nepal must also have significant youth development infrastructure, a good domestic setup, and a recognised governing body that is financially stable and not corrupt.&nbsp; With the current development of stadiums across Nepal and innovations such as the Nepal Premier League, and performances such as these, Nepal seems firmly on the way.&nbsp;

2-1 for Nepal against The Windies

Nepal is still reeling from the short but violent GenZ moment, and the reverberations are being felt around the world.&nbsp;
As news from the killings and rampage from Nepal on 8-9 September spread through the wire services and social media, in the Philippines, East Timor and even faraway Peru, banners on the streets last week referred to ‘learning lessons from Nepal’. In Ladakh last week, <a href="https://www.aljazeera.com/news/2025/9/25/bloodiest-day-how-gen-z-protest-wave-hit-indias-ladakh-killing-four">protesters set fire to the ruling BJP party office</a> and four people were killed in police firing.&nbsp;
Nepal’s GenZ was praised by <a href="https://www.nytimes.com/2025/09/19/opinion/asia-protest-youth-nepal-bangladesh.html">international commentators</a> for rising up against chronic corruption and impunity, and for achieving the fastest regime change in history. But the youth were also blamed for the arson and vandalism even though the groups said they had no part in it — most &nbsp;foreign media also did not highlight enough the infiltration by radical groups.
“We were not expecting the protests to turn so violent and deadly. On the second day, things escalated so quickly it became difficult to keep track. We were rushing on the groud and making calls to confirm what was happening,” recalls Paavan Mathema of Agence France-Presse (AFP) in Nepal.
The GenZ protest this month was a lesson on the mechanics of social media. Hashtags like #youthagainstcorruption and #nepobaby from Indonesia inspired Nepal’s youth to take to the streets, but events here in turn triggered protests elsewhere. The international news agencies and mainstream global tv channels were not as important in this information cross-pollination.
The movement was organised online and spread quickly in no time, but it was disinformation and fake news that spread faster than facts. The over-simplification by international media was because it had to explain 30 years of political evolution in a country that they mostly ignored in the past, this sometimes tended to be misleading.&nbsp;
While the Oli government’s social media ban of 26 platforms starting 5 September poured oil on the fire that had already been lit by a disparate group of desperate youth, their outrage over decades of corruption and impunity was reaching a breaking point. There was extreme disenchantment with serial politicians recycling themselves in power.&nbsp;
“The ban on social media definitely triggered the protest, but we put a high priority on accuracy and speed during reporting in such times,” explains the Nepal correspondent for Associated Press (AP) news agency in Nepal Binaj Gurubacharya. “Our own safety also becomes a prime concern in times like these, but should not be at an expense of accuracy.”
CRISIS REPORTING
But headlines everywhere including in The New York Times, The Guardian and others that used wire service content initially highlighted the social media ban as the main reason for the protest. They were soon called out by protesters, while <a href="https://institute.aljazeera.net/en/ajr/article/3358" target="_blank">Al Jazeera</a> and its <a href="https://institute.aljazeera.net/en" target="_blank">Media Institute </a>were applauded for more nuanced coverage.
Another positive example of international media supplementing the stories by local journalists was <a href="https://www.france24.com/en/" target="_blank">France 24’</a>s detailed <a href="https://www.france24.com/en/asia-pacific/20250915-nepal-police-protests-violence-kathmandu" target="_blank">forensic analysis</a> of the security forces firing live ammunition at protesters at Parliament on 8 September.&nbsp;
What really went far and wide around the world were dramatic YouTube videos about the violence, and memes on social media. <a href="https://nepalitimes.com/here-now/the-accidental-journalist" target="_blank">A British tourist</a> who filmed street protests did the work of an on-the-ground journalist and got millions of views globally for some of <a href="https://www.youtube.com/watch?v=Slq6zWu9o9w" target="_blank">his YouTube videos</a>.&nbsp;
But some of the misinformation or fake news on social media was also picked up by the mainstream press, like the <a href="https://timesofindia.indiatimes.com/world/south-asia/nepal-violence-ex-pm-khanals-wife-dies-after-house-torched-president-urges-calm-dialogue/articleshow/123791004.cms">wrongly reported death of former Prime Minister Jhalanath Khanal’s wife</a> in an arson attack on their home. A video of the Finance Minister Bishnu Poudel being <a href="https://www.ndtv.com/world-news/video-nepal-finance-minister-chased-through-street-kicked-attacked-9243749">chased and beaten</a> by protesters also turned out to be someone else.&nbsp;
Some international outlets, mainly in India, also fell prey to a fake video that K P Oli had fled to Dubai. Even this newspaper’s online edition had to correct it after wrongly reporting it without verification.&nbsp;
Indian tv channels which did &nbsp;extensive coverage of events in Nepal, with many Nepalis relying on them and believing their content — especially during the protests when Nepal’s main channels went off air as they were being attacked.
All this got out of hand, and protesters in the week after the violence started ridiculing and harassing Indian tv correspondents as they tried to interview talking heads outside the charred Parliament building, or on the streets.
<a href="https://www.newslaundry.com/2025/09/09/foreign-hand-gen-z-data-addiction-5-ways-indian-media-missed-the-nepal-story">Indian media</a> were also the first to accuse US involvement in sparking a ‘colour revolution’ in Nepal. They later claimed that former Nepal Electricity Authority (NEA) chief and now Energy Minister Kulman Ghising and even Kathmandu Mayor Balen Shah have been appointed interim prime minister in Nepal. These were rumours in Nepal, but were reported as news.&nbsp;
“Fact checking is crucial while covering such movements, and since we are telling an important story about Nepal to the world, double checking becomes important as it sets the international narrative,” says Mathema.
“We were constantly double checking numbers and information with concerned authorities and parties to make sure we were accurate, especially as misinformation was rampant,” she adds.
Apart from Indian media, international news agencies got reinforcements of reporters, photojournalists and editors from the region, and other foreign correspondents also flew in when Kathmandu airport was opened after 48 hours.
Adds Mathema: “Sometimes foreign reporters can give a fresh perspective or an angle which we could not see or cover. So their inputs are always helpful.”
In the aftermath of the violence, there were plenty of jokes and memes, clips of protesters dancing, in weird poses and performing martial arts, showcasing the light hearted side of the protests while also <a href="https://nepalitimes.com/here-now/nepal-s-meme-revolution">reaffirming the resilience</a> of people able to bounce back from something so traumatic.
The GenZ clean-up campaigns, neighbourhoods helping restore burnt out police stations and local people’s emotional reaction to the burnt out hulks of government buildings at the city centre also <a href="https://www.scmp.com/week-asia/people/article/3325635/nepals-gen-z-protesters-lead-clean-campaign-after-violent-clashes">made news</a>.
“After the protests, people were quick to gather and clean up public spaces and paint police stations. This is a scene which may not be so common in other countries with similar violence,” adds Gurubacharya. “So it became an important story to also tell the world.”&nbsp;
In less than two days, the world saw a dramatic toppling of a democratic government. With the interim government led by former chief justice Sushila Karki, there is much hope. She has expanded her ministerial cabinet, and the election has been announced for 5 March 2026 but between then and now, a lot remains uncertain.&nbsp;
And Nepal will continue to be watched by national and international media alike until then and after. AP’s Gurubacharya sums it up: “For now, we are taking it one day at a time.”

International spotlight on Nepal

From the echo chambers of social media to neighborhood tea shops, the hot topic two weeks after the GenZ revolt toppled Nepal’s government is whether the country should now have a directly elected prime minister. Although this has been proposed before as a way to end the instability in heads of government chosen by the biggest party or coalition in Parliament, it has found supporters and critics in the aftermath of the protests. As democratic as it sounds, a directly elected executive is not that simple.&nbsp; Nepal’s 2015 Constitution does not allow it, but for a young generation impatient for change, this demand raises critical social, political and constitutional questions. Nepal has seen a multiplicity of systems in the past 45 years: from a partyless absolute monarchy to a constitutional one, a parliamentary democracy and then a federal republic. But they have repeatedly failed to bring stability, good governance or an end to corruption in Nepal. But even though lately they have ensured civil liberties, the public was losing hope for the future, especially the young who could air and amplify their outrage on social media. Unbridled corruption and ideologically mismatched fragile coalitions acting with impunity, led many to conclude that a directly elected prime minister would ensure stability and accountability. ‘We have repeatedly trusted the same political parties, but they have repeatedly broken that trust, so it is no longer possible to trust that system anymore,’ says Miraj Dhungana, popular for the TikTok videos asking young people to go out into the streets to rally against corruption, and seen by many as the ‘original’ representative of Gen Z.&nbsp; In interviews he has stated that it has become necessary for Nepal to have a directly elected executive head through constitutional amendment. Dhungana himself did not participate in the protests after his meeting with pro-monarchist businessman Durga Prasai on 7 September sparked controversy that he as a lackey. Binod Deuba Thakuri of the Nepal Student Union who also participated in the GenZ protests thinks Nepal is institutionally not ready for directly elected prime minister: “Our democracy is not mature yet, our institutions are not strong, and we are vulnerable to social media induced populism.”&nbsp; CONSTITUTION AMENDMENT Amending the Constitution would also open a pandora’s box, with other demands, and should be left to the next legislative body, he adds. In her address to the nation on Friday, Prime Minister Sushila Karki who is a former chief justice also clarified that her interim government does not have the mandate to amend the Constitution to make way for a directly elected head of government, and it should be up to the new legislature and government after the 5 March election.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250919130956_799b2d43dccca73b3bff96e435efc0752203117b2cb219d0073994c0e6f2ee25.jpg" data-media-id="editor_0" data-image-id="20250919130956_799b2d43dccca73b3bff96e435efc0752203117b2cb219d0073994c0e6f2ee25" data-rendition-name="original" width="4160" height="2774" loading="lazy" alt="Constitution Day NT"> <figcaption>Constitution Day address by Prime Minister Sushila Karki on 19th September earlier this month.</figcaption> </figure>  The demand for a directly elected executive head was first raised by Maoist leader Pushpa Kamal Dahal after the 2006 ceasefire. He proposed himself as Nepal’s first executive president ahead of the 2008 Constituent Assembly elections. While the UML did not strongly oppose the idea, the Nepali Congress (NC) stuck to a parliamentary framework. The 2015 Constitution ultimately clinched it for the current parliamentary system. The Constitution stipulates that the process of selecting a prime minister is based on parliamentary strength: the President appoints the leader of the party with a majority in the House of Representatives, or, in the absence of such a majority, a member who can demonstrate majority support. If these efforts fail, provisions exist for coalition or minority governments, and ultimately for the dissolution of the House and fresh elections. The Constitution currently makes no provision for a directly elected prime minister, which means that any attempt to introduce a directly elected executive would first require the careful design of a democratic mechanism to amend the Constitution and set out the procedures for such an election.&nbsp; “There is no legal legitimacy to have the directly elected executive head of the country in the March election, except if political legitimacy surpasses legality but that would mean a new constitution,” explains senior advocate Surendra Kumar Mahato. “Many other institutional arrangements like the appointment of the judiciary, the role of the president, and other check and balance mechanisms would need to be restructured.” Mahato says: “Nepal’s Constitution itself is not at fault — it is the political actors, who have failed to uphold good governance within its framework. Changing systems does not ensure better governance.”&nbsp; Changing the Constitution also needs a broad political consensus, the institutional capacity of the state must be carefully considered to ensure such a new system can function effectively in practice and not simply in theory. Empowering an executive head through direct elections should not come at the expense of accountability or parliamentary oversight, and there should be checks and balances in place. LESSONS FROM ABROAD Sri Lanka’s 2022 Agralaya was fuelled by the anger that the directly executive head turned out to be an authoritarian who backslides on democracy. Under Sri Lanka’s 1978 Constitution, the country adopted a directly elected executive presidency with sweeping powers over the cabinet, appointments, dismissal of parliament, and control over key institutions.&nbsp; Over the years, President Mahinda Rajapaksa removed term limits via the 18th Amendment in 2010, centralised appointment powers, including judges and heads of independent commissions, and used constitutional changes such as the 20th Amendment (2020) to reverse safeguards that limited presidential authority, thereby subordinating the legislature, weakening oversight, and enabling authoritarian control.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250914060932_a96e1046d0b148982b33f2dcbe56f349dc0c20a087e358360eb2dddcfe0b5072.jpg" data-media-id="editor_1" data-image-id="20250914060932_a96e1046d0b148982b33f2dcbe56f349dc0c20a087e358360eb2dddcfe0b5072" data-rendition-name="original" width="4640" height="2610" loading="lazy" alt="GenZ and Aragalaya"> <figcaption>Anti-government protest in Sri Lanka on 13 April 2022 in front of the Presidential Secretariat. Photo: WIKIPEDIA</figcaption> </figure>  Nepal’s multiparty framework upholds an institutional balance where both the governing party and the opposition have defined roles. This parliamentary setup prevents power from being overly concentrated in one individual and ensures accountability through parliament and competing parties. Beyond the neighbourhood, the United States has a directly elected executive system. Donald Trump exemplifies how direct electoral mandate can fracture institutional check mechanisms. He has leveraged his power to attack judges, frame political opponents, turn legal defeats into rallying points for his supporters, often using pliant media platforms to reinforce the idea that institutional checks impeded the popular will. In Nepal, there is a risk that a directly elected prime minister could bring up a populist media savvy messiah who could use public grievances to get to power and consolidate it. Social media can be mobilised and easily saturated with posts to fuel a political narrative of choice.&nbsp; In the past, former prime minister K P Oli’s ‘digital army’ has been lobbied on his behalf on social media. Even without an ‘IT sena’, it is not unusual for governments to collaborate with social media platforms as seen in the US and India.&nbsp; In Nepal, a directly elected prime minister would raise the stakes, turning the battle for votes into a battle for attention online, where a leader who wins the algorithm also wins the elections, just as Kathmandu Mayor Balen Shah demonstrated in 2022 with support from groups like MRR and RONB. The Balen Phenomenon started in social media trickled to the ballot box.&nbsp; The digital space mas ensure that it is not trendy to dislike Balen. Comments that are critical of the Kathmandu Metropolitan City’s treatment of street vendors or of the mayor himself are met with backlash from supporters. Or, if the comments did not get any likes, the algorithms filtered them out as ‘not relevant’.&nbsp; The conversation of Shah often centred on his emotive responses and sentiments, generating strong engagement online. Meanwhile, policy debates received comparatively less attention.&nbsp; “Choosing a leader directly through an election means that we are vulnerable to populism and undermining of the democratic process, accountable institutions,” says Thaukri. Political activist Pradip Gyawali admits that the GenZ revolt was an example of how social media is a powerful tool to organise and disseminate information. But there are risks posed by disinformation and fake news online.&nbsp; “More media and political literacy among the people before the election in March is crucial to control the damage social media could do to influence voter behaviour,” he says.&nbsp; Beyond social media, online news increasingly relies on sensational, click-driven headlines to attract readers in a competitive digital market. A recent survey showed that 82.6% of GenZ (16- 24) rely on Facebook for news and 51.4% on YouTube.&nbsp; Nepali people with higher education seemed to engage with news more (99.1%) than illiterate individuals at 52.1%. Byte-sized headline-only journalism is leaving readers to their own devices, and vulnerable to media infiltration by IT cells.&nbsp; With social media actively shaping the course of elections, and news consumption, debates about changing the Constitution or the system of governance yet again may not ensure the demands for corruption free governance is met. Instead, strengthening media and political literacy among voters is key to prepare for the elections in March. Ayusha Chalise is a communication and development scholar specialising in how politics is experienced in the digital space.

Nepal's democracy keeps doubting itself

The word for ‘development’ in Nepali is bikas. The world for destruction is binas. &nbsp; The two words not only rhyme, but replacing just one consonant gives it an opposite meaning. It also demonstrates how easily what we think is <a href="https://nepalitimes.com/editorial/development-destruction-yt3t1yhu">‘Development’ can be destructive</a>.&nbsp; University libraries in Nepal and around the world are stacked with hundreds of books dissecting ‘development’. They can be divided broadly into at least two types: some authors define development as a moral imperative to improve living standards of people in the underserved parts of the world, mostly in the Global South.&nbsp; Others critique development either as being an ‘industry’, or as a continuation of the western colonial project that imposes dependency and corruption, perpetuates the donor-recipient hierarchy, and ends up disempowering intended beneficiaries. Somewhere in between are books by experts who have tried to find a middle path with concepts like ‘sustainable human development’, ‘people’s participation’ or ‘public-private partnership’. But even the staunchest proponents of traditional development models will admit that all is not well, somewhere along the line we lost our way. Peter Sutoris and Uma Pradhan have dared to take the bull by the horns to find a new path to ‘reimagine’ development, and explore new templates to confront a world wracked by interconnected crises of conflict, inequality, environmental decay and climate breakdown. Their book Reimagining Development: Bold Directions Towards a Thriving World lays out a roadmap for countries like Nepal as they try to fix what went wrong. Billions of dollars were poured into Nepal’s ‘development’ over the past seven decades, but the country is littered with the carcasses of failures like the rusted abandoned tractors from the Rapti Valley Development Project 65 years ago. To be sure, there have been catalytic success stories along the way. It is not a coincidence that whatever has worked well in Nepal since 1990 has the word ‘community’ in it — things fall into place when local groups are given ownership to decide what they need, and allowed to decide what they need to do.&nbsp; Some examples in the book include <a href="https://nepalitimes.com/banner/reviving-nepals-community-forestry-success-story">Nepal’s community forestry project</a>, which Sutoris and Pradhan cite as an example of the kind of possibilities needed to reimagine development for a ‘thriving world’. Local communities were handed control to manage their natural resources, revive traditional conservation practices, and assert command over their own destiny. Nepal’s community forestry program together with the Local Self Governance Act that decentralised power to elected local bodies in the 1990s was the best example of how development can be a political act to ensure an equitable future, while conserving nature. Sutoris and Pradhan write: ‘Substantial evidence from Nepal indicates that community forestry enhances forest protection and regeneration … Village Development Committees that had adopted community forestry recorded a 77% increase in forested area, compared to a 13% increase in the villages without community forest.’&nbsp; Peter Sutoris was born in the former Czechoslovakia that saw the 1968 Prague Spring uprising and the Velvet Revolution of 1989. Uma Pradhan is from Nepal, which has witnessed successive People’s Movements in 1980, 1990, 2006 and earlier this month in 2025. &nbsp; ‘It was perhaps because of these experiences of witnessing the remaking of the world in the wake of the end of the Cold War that we come to this book with a strong belief that even the most rigid collective trajectories can and do change,’ the authors write in their introduction. Their book has three parts. The first one dissects the Development Industry and the model of perpetual ‘growth’. (Interestingly, the word ‘growth’ is used in medicine to signify malignancy.) The authors propose re-centering the stories of beneficiaries and their lived experiences which have been pushed to the margins in ‘project’ design of mainstream Development with a capital ‘D’. &nbsp; The book defines development with a lowercase ‘d’ as a more democratic bottom-up approach. Capital ‘D’ Development on the other hand involves ‘developers’ wanting to ‘develop’ societies, replicating the wasteful, unsustainable growth path of the industrialised countries. &nbsp; The book’s second section examines the tension between sweeping international concepts of development, and how it is not quite relevant to the reality of rural areas of countries like Nepal. The prevailing notion that development ‘aid’ flows mostly from cash rich countries to cash poor ones ignores the fact that it mostly takes from the poor in rich countries to give to the rich in poor countries. After all, the Global South also includes the underserved parts of the Global North.&nbsp; RETHINKING PROGRESS The Development Industry does ‘develop’ certain segments of the economy, just not so much the sections it is supposed to uplift. The <a href="https://nepalitimes.com/here-now/usnoaid">cancellation of USAID</a> this year vacated hundreds of rented offices and houses in Kathmandu, consultants and contractors became jobless, and even Nepal’s domestic airlines lost business.&nbsp; The third part of this book imagines what ‘A Thriving World’ can look like if we listened more to indigenous communities and their knowledge of the stewardship of nature, adopted best practices about inclusive and decentralised decision-making, and explores examples of ‘degrowth’ and ‘postgrowth’ to address unsustainable consumerist, extractivist economics, and the climate crisis. Sutoris and Pradhan admit that these concepts are not new. Practitioners have questioned the top-down model for decades, but their book Reimagining Development takes a fresh, non-conventional approach to bridging the best of the ‘old’ development discourse with a ‘new’ imagining that transcends entrenched positions. The authors cite Buddhist mindfulness techniques, the concept of ‘radical humility’ and the idea of deep time to zoom out for a fresh perspective on a novel development paradigm to ‘think about humanity’s position in the world’. ‘Ultimately, this book is likely to disappoint both the proponents and critics of development,’ the authors admit. ‘The proponents might view the arguments we put forward as too esoteric and not attuned to what can realistically be achieved. The critics might be dismayed by our &nbsp;unwillingness to dispose of the concept of development altogether and by our attempts to give credit to the Development establishment where credit is due. Our aim, however, is not to please either camp.’ The authors do not want to throw the baby out with the bathwater. However, the obsolete way of forcing soft states to adopt the path of linear modernisation and infinite growth so they can ‘graduate’ to a higher per capita income bracket must be rethought. Alternative models are available to confront the momentous crises facing people and the planet.&nbsp; Nepal’s <a href="https://nepalitimes.com/here-now/nepal-s-historic-youth-dissensus">GenZ protesters this month rose up</a> against corruption and bad governance. But underlying it was a failure of the development path that the country has chosen, which contributed to wanton destruction of ecosystems, the unequal allocation of &nbsp;benefits, and corruption that ensured both over- and under-development.&nbsp; Nepal’s young idealists may not have been able to articulate it in the language of academic discourse, but on social media platforms they have discussed a post-development era to reexamine and reimagine development, accountability, embedded ethnocentric hegemony, and an in-built structural inequality in the system.&nbsp; These lines from Sutoris and Pradhan’s book could almost be word-for-word from the GenZ manifesto: ‘Development encompasses not only financial prosperity but social justice, environmental sustainability, and the more plural development pathways that respect the world’s diverse cultural, historical, political, and social contexts.’&nbsp; Indeed, instant global connectivity through social media platforms has meant that socio-political movements elsewhere in the world impacted on young Nepalis, just as the events in Nepal this month are now influencing youth globally.&nbsp; These lines from Reimagining Development were written before the September Uprising in Nepal, but were a warning of things to come: ‘The current moment feels different. Perhaps due to the global nature of many of the contemporary movements facilitated by social networks, perhaps due to the movements’ sheer scale, or perhaps as a result of the multitude of challenges faced by the world, the feeling in the air seems to be that accumulated critiques of Development are more pressing than ever. If development is to remain a historical moment, it must reinvent itself and finally listen to the voices from below.’ &nbsp; Kunda Dixit is the author of Dateline Earth: Journalism As If the Planet Mattered, and publisher of Nepali Times.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2025092704094_b795907f8fa9a5ec67508e683e7a65737c6c237ca5482425bcbe5ee6254bb3f0.jpg" data-media-id="editor_4" data-image-id="2025092704094_b795907f8fa9a5ec67508e683e7a65737c6c237ca5482425bcbe5ee6254bb3f0" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Development book details"> </figure>

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