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

original

674x448

610x380

500x500

400x266

400x240

400x203

301x200

1250x600

1084x550

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

Architecture can be a powerful agent of change, shaping not just spaces but the way people live, connect, and experience the world.&nbsp; For Nepal, which is <a href="https://nepalitimes.com/banner/natures-fragile-gift-to-nepal">gifted by nature</a> and rich in <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/ambassador-fund-cultural-preservation-nepal,2092">cultural heritage</a>, &nbsp;reviving rural architecture with modern amenities could hold the key to more <a href="https://nepalitimes.com/here-now/what-sustainable-tourism-means-in-practice">sustainable tourism </a>that benefits local people more. “<a href="https://nepalitimes.com/banner/bayalpata-hospital-in-nepal-wins-global-design-award">Design and architecture</a> are amazing tools to create a unique experience for visitors,” says Spanish architect Tomeu Esteva of Esteva i Esteva Architecture Studio. “Difficult destinations have beautiful hotels with design and comfort.” Esteva was in Kathmandu with his colleagues at an event organised by the Spanish Honorary Consulate at Dwarika’s Hotel last week to showcase buildings which Nepali architects can adapt with local material and design inputs.&nbsp; Rural architecture holds a unique significance: it is more than a shelter and must reflect <a href="https://nepalitimes.com/here-now/inking-an-idenity">local identity, culture</a> and <a href="https://nepalitimes.com/here-now/saving-humla-from-heritage-loss">heritage</a>. An area’s natural and cultural harmony can be upset by <a href="https://nepalitimes.com/here-now/protecting-protected-areas-from-infrastructure?fbclid=IwAR1wK0MDFlFST_2EYb3f54LS4-fPt6rYfLG1DJ1JaQsU3w8-ezyXIxGOqzk">poorly planned development</a>, speakers at the event said, but the environment can be improved and revitalised by well-integrated structures.&nbsp; Another Spanish architect, Belen Moneo, has designed hotels at elevations of 3,700m in her home country Spain that supply natural spring water spas. “<a href="https://nepalitimes.com/banner/lost-in-reconstruction">Creativity in construction</a> must be encouraged. Rural architecture always shows possibilities of what we can do better,” Moneo explains, adding that designs must enhance <a href="https://nepalitimes.com/opinion/the-healing-power-of-nature">the beauty of nature</a> and give a natural feel at a time when steel, glass and cement dominate <a href="https://nepalitimes.com/here-now/rebuilding-kathmandu-after-the-1934-quake">urban design</a>.&nbsp; This is why the <a href="https://nepalitimes.com/here-now/weaving-nature-into-craft">use of natural products</a> such as bamboo, local timber, straw and rammed earth are in demand from customers who want a fresh eco-friendly look encouraged in construction of rural architectural structures. The demand for boutique hotels has increased world over, with &nbsp;more and more tourists favouring aesthetics, experience and comfort over price. While creativity is an important part of <a href="https://nepalitimes.com/here-now/architecture-for-mountains">construction and architecture</a>, incentives to build and use <a href="https://archive.nepalitimes.com/article/nation/Building,370">rural construction materials</a> still remain minimal, and Moneo emphasises the significance of design and execution.&nbsp; Esteva helped design the Vana Retreat in Dehradun that kept the natural environment in focus, with the structure giving an elaborate aesthetic experience to visitors. Another example is Hotel Las Mercedes in the Dominican Republic which was designed and constructed by Moneo and the company she co-founded Moneo Brock, respecting and revaluing the traditional architecture of the area. Hotels providing such experience could attract tourists and revenue. The Spanish ambassador to Nepal Juan Antonio March Pujol said, “The role of architecture and architects in developing tourism is crucial, not only in urban areas but rural settings as well.”&nbsp; The concept of rural boutique hotels gained traction in Spain during the 1990s, particularly in regions like Majorca with economic and environmental sustainability as the main focus. In Nepal <a href="https://nepalitimes.com/opinion/12-full-opinion/guiding-nepal-s-tourism-industry">the tourism industry</a> directly employs about 1 million people, and makes up about 8% of the country’s GDP. In Nepal, the stone homes of <a href="https://nepalitimes.com/news/reviving-himalayan-vulture-and-culture">Mustang and Manang</a>, bamboo and mud structures of <a href="https://nepalitimes.com/here-now/the-tarai-s-shrinking-forests">the Tarai</a>, and the Kathmandu Valley’s terra cotta tile skylines, graceful temples, and tranquil bahal courtyards are all examples of <a href="https://nepalitimes.com/here-now/nepal-s-traditional-seismic-resistant-designs">Nepal’s traditional architecture</a>.&nbsp; Nepali architect Sarosh Pradhan has been working for the past eight years on the Brakka Village project in Manang Valley north of <a href="https://nepalitimes.com/banner/municipalities-want-to-manage-annapurna">the Annapurnas</a>. Other examples of this kind of rural architecture for high-end tourism are the Shinta Mani Hotel in Mustang and Khumbu Lodge below <a href="https://nepalitimes.com/news/mt-everest-pvt-ltd">Mt Everest</a>. Says Pradhan, “There are places in Nepal that radiate purity and embrace simplicity. Creating projects in such settings require deep reflection and thoughtful planning.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f.jpg" data-media-id="editor_19" data-image-id="20250421030444_a07a23f6b60fa89c0f35b9dc1aaf19937da4881e6bfb2e1858f3c27dff91729f" data-rendition-name="original" width="4608" height="2184" loading="lazy" alt="A new architecture for Nepal's tourism"> </figure>  Rural architecture is not easy, and sometimes more expensive. Inflation, energy efficiency, <a href="https://nepalitimes.com/here-now/those-who-stay">the climate crisis</a>, and <a href="https://nepalitimes.com/banner/cost-of-living-in-a-big-city">increased costs of living</a> pose obstacles to sustainable rural architecture. Read also: <a href="https://nepalitimes.com/here-now/forgotten-international-starchitects-in-nepal">Forgotten international starchitects in Nepal</a>, Anne Feenstra and Varun S Bapu Esteva says faith and trust between client and architect is necessary for any project to be successful. He adds that architects must practice being humble, the process of designing always involves learning and not imposing their ideas on clients. Nepal is uniquely positioned for the growth of <a href="https://nepalitimes.com/banner/hiking-up-the-benefits-of-tourism">rural tourism</a> because of its stunning countryside as well as its internationally renowned traditions in holistic wellness. Creating infrastructure that is small, thoughtfully planned and that respects both tradition and contemporary hospitality standards is crucial. “Projects in Nepal can be made cost effective by using materials from houses that have been brought down,” says Esteva. “Pilot projects involving <a href="https://nepalitimes.com/banner/local-government-by-the-people-for-the-people-of-the-people">local people </a>and simple designing also helps the process.” <a href="https://nepalitimes.com/banner/vacant-homes-become-homestays-in-nepal">The growth of homestays in Nepal</a> is a step in the right direction, but they are still a bit too rustic for the international traveller who also wants comfort and is willing to pay extra for it. Upgrading the facilities in homestays and ensuring that the <a href="https://nepalitimes.com/here-now/an-archive-of-nepali-heritage">architectural heritage</a> of the locality is preserved using locally sourced building material could allow owners to charge more. Says Sangita Shrestha of Dwarika’s Hotel, “Our effort is to build upon rural architecture by empowering local communities and using what is available locally. We can fine tune and encourage indigenous design and training.” The vision goes beyond just boosting the economy, it is about building a future where tourism helps villages grow in a healthy and lasting way. Instead of using up resources, it gives back to the land and the people. It supports local communities by<a href="https://nepalitimes.com/opinion/staying-in-nepal-to-create-jobs"> creating jobs</a>, improving infrastructure, and protecting natural beauty. When done right, tourism can be a tool for <a href="https://nepalitimes.com/editorial/progress-and-or-preservation">preserving culture and nature</a>, not harming them. Architects must therefore see their work as more than just designing buildings, they also need to care deeply about people and places, especially in rural areas that can benefit the most.&nbsp; With global interest in sustainable and off-the-beaten-path travel increasing, Nepal stands at the cusp of a <a href="https://nepalitimes.com/news/missing-out-on-nepal-s-tourism-potential">tourism transformation</a> that values community-driven, eco-conscious hospitality. A mix of modern ideas and traditional knowledge could transform rural tourism in Nepal. Says Shrestha, “Young architects should spend time with <a href="https://nepalitimes.com/latest/the-unsung-heroes-of-conservation">local and indigenous communities</a>, listen to their stories, and learn from their <a href="https://nepalitimes.com/banner/life-and-livelihood-in-remote-nepal">ways of living</a>. These communities have deep knowledge about the land, materials, and climate. If this wisdom is used in new designs, it can help create tourism spaces that truly benefit everyone.” &nbsp;

A new architecture for Nepal's tourism

Extract from an addendum to Nepal's Two Wars, Chapter 2 in the updated edition of Essays on Nepal: Past and Present by Sam Cowan, a retired British Army general with a long association with the Gurkhas. The book was first published in 2018, and republished earlier this month by FinePrint exclusively on Amazon. The addendum details a one-to-one conversation the author had in the <a href="https://archive.nepalitimes.com/news.php?id=8884">Royal Palace </a>with the <a href="https://archive.nepalitimes.com/news.php?id=8371">King Gyanendra</a> in November 2002 just after he had taken his initial steps on the road that ultimately led to <a href="https://archive.nepalitimes.com/news.php?id=14681">the abolition of the monarchy</a> in Nepal in 2008. In the early evening of September 16, 2002, in my role as Colonel Commandant of the Brigade of Gurkhas, I had my second and last official audience with King Gyanendra to give him an update on the Brigade’s activities over the previous 12 months. I had some 6 or 7 such audiences with <a href="https://nepalitimes.com/here-now/preserving-king-birendra-s-family-home">King Birendra</a>.&nbsp; These were official affairs with the British ambassador of the day present, along with key <a href="https://archive.nepalitimes.com/news.php?id=12233">palace officials</a> and a representative from Nepal's Foreign Ministry. The two monarchs were very different in character and temperament, but both treated me with the utmost civility and made the audiences as relaxed and easy for me as possible.&nbsp; It is, however, worth recording that when the official business had been covered, King Birendra, with a twinkle in his eye, often ended by asking, “Now General, what’s the gossip in London?” The second audience with <a href="https://archive.nepalitimes.com/news.php?id=8026">King Gyanendra </a>was my last official act in uniform. We came back to Kathmandu in the first week of November (after treks) to stay for a few nights with our Defence Attaché before heading back to the UK. Waiting for me was a message from the Palace saying that King Gyanendra would like to meet me informally: <a href="https://archive.nepalitimes.com/news.php?id=6933">no uniform</a> and no ambassador.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750.jpg" data-media-id="editor_7" data-image-id="20250421080420_f9046f9882d4481781d14f2b64f18c7fbbea62562e1d74e3465de6d01fb43750" data-rendition-name="original" width="1750" height="2406" loading="lazy" alt="Gyanendra crowned page 1"> <figcaption>Nepali Times Special Edition of 6-14 June 2001 with enthronement of Gyanendra. </figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2.jpg" data-media-id="editor_8" data-image-id="20250421080424_21333d6ae21828eb47fe3f849438d215fe2804460d47bb2896ef4aee4e895ad2" data-rendition-name="original" width="1500" height="1857" loading="lazy" alt="Royal massacre"> <figcaption>Nepali Times 22-29 June 2001 covering the royal massacre after which Gyanendra became king. </figcaption> </figure>  Although I had no idea what the purpose of the meeting might be, events in Kathmandu since I last saw the king put me on edge. On October 4, 2002, Gyanendra had dismissed Prime Minister Sher Bahadur Deuba, allegedly for failing to hold <a href="https://nepalitimes.com/news/what-goes-on-in-nepal-s-elections">elections</a>. He had put in place a new prime minister and a cabinet personally selected by him. When I heard the news on my travels, the people I met were generally supportive of the king’s actions. There was a general view that something had to be done, the country was going nowhere, and the king deserved his chance, not least to solve<a href="https://nepalitimes.com/latest/14-years-after-conflict-no-closure-in-nepal"> the Maoist </a>problem. Back in Kathmandu, views were not so sanguine. The chosen prime minister, Lokendra Bahadur Chand, was a relic from <a href="https://nepalitimes.com/here-now/mob-movement-and-mayhem">the Panchayat period</a> whose party had failed to win a single seat in the last elections held in 1999. Some of the chosen cabinet ministers had, to put it mildly, dubious reputations, and others had no record of proven competence in any field. There was a fear that the king’s real motive in dismissing <a href="https://nepalitimes.com/editorial/deubas-denouement">Deuba</a> was to start to reverse the democratic gains made since 1990. I informed <a href="https://nepalitimes.com/news/nepal-britain-mark-centenary-of-1923-treaty">the British ambassador</a> about the invitation. He was strongly against accepting it, which was probably the clinching reason for my decision to do the polite thing and accept it. On the evening of November 7, 2002, I presented myself at the royal palace, alone and in civilian attire.&nbsp; As in the past, the Military Secretary, Major General Vivek Shah, met and escorted me into the presence of the monarch. This time, however, he was politely asked to leave the room and shut the door behind him. King Gyanendra greeted me warmly and invited me to sit down.&nbsp; Read also:<a href="https://nepalitimes.com/news/the-ghost-of-monarchy-returns-to-haunt-nepal"> The ghost of monarchy returns to haunt Nepal</a>, Shristi Karki  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558.jpg" data-media-id="editor_15" data-image-id="20250421080424_e382af945d0ad2a04ae41fabe5393f793dd10f54cb1220f111c7c9e7423eb558" data-rendition-name="original" width="1000" height="993" loading="lazy" alt="Gyanendra coup"> <figcaption>Nepali Times 4-10 February 2005 after king Gyanendra's coup imposed media censorship. anendra became king. </figcaption> </figure>  I had wondered, and to be truthful, had worried, not just about the purpose of the meeting, but about how the conversation might start and develop. I reduced my resolve to two points: be polite but speak candidly. The latter resolve was quickly put to the test with the king’s opening words: “Sam, [in previous meetings it had been ‘General’, you walk the highways and byways of this land more than most, tell me what the common man is thinking?” &nbsp;“Your Majesty, I have no idea what they are thinking, but they are waiting.” “Waiting?” “Yes, Your Majesty, they are waiting to see whether what you did some weeks ago in appointing your own prime minister and cabinet ministers is going to make any difference to their lives or whether it is just going to be more Kathmandu hot air.” “Everything is going to be difficult and is going to take time, a lot of time.” “Your Majesty, time is the one thing you don’t have. You must act quickly and decisively to take advantage of the opportunity you have created. Everyone knows that you have appointed these new ministers. Why don’t you get them in here one by one and tell them that they have three months to deliver a programme in their area of responsibility that is going to make a difference to people’s lives? Most will fail to do so. Sack them! It will be a powerful signal of your strong intent to deliver real change.” I can express the opening of our conversation in this way because just about every word is still etched in my mind. The king’s response to my last quoted words was to challenge me to give an example of something that could be delivered quickly. I can give a verbatim record of what I said in response to this unexpected challenge: “Health posts, Your Majesty, there is no shortage of them throughout the country as building them has been one of the sources of local corruption, but very few have any medicine to issue at present or have skilled people to assess and meet medical needs. Your Majesty, children are dying for lack of a few pills. Given the right priority, over a period, say of six months, every health post could be fully stocked with medicine and manned with trained people. This is something I could help to lead for you as I know it would have strong international backing. At last, people would know that you mean business.” As I warmed to the theme, I could see no sign of the king having any enthusiasm for the idea, and I quickly disengaged as it dawned on me, as it had clearly dawned on the king, that the reason for the deficiencies in health posts was to prevent any Maoist combatant from gaining access to any <a href="https://nepalitimes.com/opinion/tech-away/nepal-s-health-tech-industry-is-here-to-stay">medical support</a>, and if this meant people suffering, so be it. The subject of the Maoist insurgency inevitably came up, and I took the opportunity to elaborate on what is written in the final four paragraphs of the article above. I advised King Gyanendra that, self-evidently, since there were three parties in the conflict—him, the Maoists, and the political parties—it was imperative that he form an alliance with one of them, preferably the political parties; otherwise, he would find himself isolated, as the other two parties would inevitably, at some stage, form their own alliance. However, it quickly became apparent that the king’s mind was on a totally different track. On the Maoists, he told me that he had channels open to them, but he was scathing about the political party leaders. He made it clear that they would be waiting for a very long time before he gave any power back to them, and that is a polite way of expressing the actual words he used, but “crawling through the door” is a phrase which has stuck in my mind.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5.jpg" data-media-id="editor_17" data-image-id="20250421080424_5403455ff6168f0d202a96cb53edea69136d74d59b989cfcc7cc4a1d57672cb5" data-rendition-name="original" width="2000" height="1317" loading="lazy" alt="fall of monarchy"> <figcaption>Nepali Times 28 April-3 May 2005 with cover image by Ajay Joshi of jubilant protesters after street demonstrations sidelined king Gyanendra, paving the way for a ceasfire and restoration of democracy. </figcaption> </figure>  As the conversation developed, it became ever clearer that King Gyanendra had decided to go in alone, relying on the misleading assurances he was constantly receiving from <a href="https://archive.nepalitimes.com/news.php?id=14954">the army</a>, and no doubt his close advisers, that the Maoists could and would be quickly defeated militarily, and taken out of the equation. This would obviate the need for him to do any deal with the political parties.&nbsp; Thus, the way would be clear for him to establish a version of his father’s Panchayat system, under a constitution that would be granted to the people by him, their sovereign, as his father and brother had done in 1962 and 1990. As in those constitutions, ultimate power would have remained in the sovereign’s hands. This proposed direction of travel was very clear from what the king said to me. In sum, King Gyanendra was motivated by a desire to emulate his immediate predecessors by granting his people a constitution that would restore his father’s Panchayat system in a modern form and give him a central role in decision-making. What was particularly dispiriting was that beyond this single objective he had no plan worthy of the name, nor demonstrably did he have the people with the skills to implement an appropriate plan even if one had existed. Crucially and depressingly, there was little or no indication from the king that he realised that such a course of action could put Nepal’s monarchy into serious jeopardy, as indeed proved to be the case. <h2>King Twice</h2>  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445.jpg" data-media-id="editor_19" data-image-id="20250420110436_315d519fe3d68d2406ebe1480fed54720fbf21b8907a4da5cde751fdc623d445" data-rendition-name="original" width="1302" height="632" loading="lazy" alt="“Tell me what the common man is thinking!”"> </figure>  <a href="https://archive.nepalitimes.com/news.php?id=8371">Gyanendra Bir Bikram Shah has been king twice</a>. In 1950 he was enthroned briefly as a child king (left, above) by the Rana Prime Minister Mohan Shumsher when his grandfather, King Tribhuvan, fled to exile in India. In 2001 he was crowned king again after the massacre in the royal palace in which his brother King Birendra and nine other members of his family were killed by Crown Prince Dipendra.&nbsp; During his second reign, Gyanendra gradually asserted power by sacking Prime Minister Sher Bahadur Deuba in 2002, and then taking full control after the 1 February 2005 coup. He was sidelined after the ceasefire in April 2006, and became a commoner after the Constituent Assembly finally <a href="https://archive.nepalitimes.com/article/from-nepali-press/Ftnp-abolishing,624">abolished the monarchy in 2008</a>. In the past year, Gyanendra has tried to exploit public dissatisfaction with the political parties to restore the monarchy.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788.jpg" data-media-id="editor_22" data-image-id="20250421080432_26ef4a4b0e3cee9fdc6794446702efe16550d293904b4f6dd46fe35d4d10c788" data-rendition-name="original" width="1136" height="702" loading="lazy" alt="Essays on Nepal by Sam Cowen"> </figure>

“Tell me what the common man is thinking!”

“It's Kathmandu.” Just as the family was sitting down for one of its extended lunches, that jubilant cry was from François Driard’s grandfather announcing the next posting for his diplomat parents.&nbsp; Driard (pictured) was 18 in the summer of 1996,<a href="https://nepalitimes.com/opinion/suburban-tales/chasing-a-nomad"> a bit of a hippie</a> already, and his life was about to change forever with the magical word “<a href="https://nepalitimes.com/banner/time-capsule-of-kathmandu">Kathmandu</a>”. “I was awed with that information from my grandfather, nothing else mattered … In France <a href="https://nepalitimes.com/here-now/tales-of-courage-and-suffering-cx95f89e">in the 1990s</a>, Kathmandu had a mythical aura,” Driard recalls. He came to Kathmandu for Christmas that year to visit his stepfather, the French Ambassador Michel Lummaux. It was to be the first of many visits during school holidays, before he decided to permanently settle down in Nepal. “Kathmandu, and Nepal, were very different then, it was magical, I liked the nature, the people, civilisation, temples, trees,” says Driard, who explored the country sitting on the top of buses. “Visitors talk about the crazy <a href="https://nepalitimes.com/banner/cost-of-living-in-a-big-city">urbanisation</a>, traffic jams today, and all that is true. But Kathmandu has not <a href="https://nepalitimes.com/here-now/loss-of-soul-and-soil">lost its soul</a>.” After his stepfather’s tenure in Nepal ended, Driard worked as a business reporter for international publications but decided he did not want to be anyone’s employee anymore. In 2007 he landed in Kathmandu with €20,000 in savings to invest.&nbsp; He knew a few crucial things about himself: he liked food and nature, which is very much tied up with his upbringing--full of lively conversations during lunch and dinner at the family table between <a href="https://nepalitimes.com/here-now/nepals-yak-cheese-is-on-world-map">abundant cheese, wine and cigars</a>. So he decided it would be cheese, and registered Himalayan French Cheese and went to the French Alps for a month to learn how to make Tomme de Savoie. “<a href="https://nepalitimes.com/banner/the-story-of-langtang-cheese">Cheese making is such an ancient craft </a>and so I thought I won’t need much money or studying which I hated and indeed, if you have a tamako bhado and fire you are set,” explains Driard. But Nepal’s temperature and humidity were not ideal, even at higher altitudes. The first customers for his cheese were the Hyatt Regency and Nina and Hager. But he needed to create a market for cheese in a country which only knew hard churpi in the north and soft paneer in the south. He started selling his cheeses at the Summit Hotel weekend market, expanding to his own 1905 Farmer’s Market which later moved to Le Sherpa in Maharajganj, where it is now, and also a market at Labim Mall in Pulchok. He had cow dairies in Nuwakot and Dhulikhel, and finally a yak cheese unit at 3,379m in Ramechhap. It was the yak blue cheese from here that went on to win a Gold Medal in France, putting Nepal’s French cheese on the world map. “People come and try our cheese at the market, they ask questions. There is a lot of education to be done about cheese,” adds Driard, who also has three cheese shops in the Valley. Driard now makes 25 types of cheese. The products are being noticed and every year he has French students coming to Nepal to learn the art of yak cheese making. “In France, one family or company makes one kind of cheese for generations. In that I’m very unique as a cheese artisan,” he says. “The students come in to learn but I tell them to also teach us something too, add another cheese to my collection.” Read also: <a href="https://nepalitimes.com/here-now/langtang-after-10-years">Langtang after 10 years</a>, Sonia Awale Being a foodie, Driard is now also dabbling in meat with his own charcuterie at Meatini with bacon, ham, sausage and pâtés. All of this is now served at his Emilio’s Pizza, a leafy hideaway in Lazimpat. His South Side in Moksh is probably the smallest wine bar in the world. “I call the process sublime,” says Driard of his ventures, which have grown organically. “You need the same temperature and humidity of 12°C and 80% for cheese, meat and wine.” Emilio’s speciality is the eight-cheese pizza (which has eight types of cheeses), and a pizza with bhutan topping (not the country but fried intestines and organs Nepali-style). He has opened a small branch at Courtyard in Pokhara.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250426070456_bacae302c040dc18eeecdeafda72ddf06a6d2cec138ea9be7e45fe94cdf8b5b3.jpg" data-media-id="editor_8" data-image-id="20250426070456_bacae302c040dc18eeecdeafda72ddf06a6d2cec138ea9be7e45fe94cdf8b5b3" data-rendition-name="original" width="1500" height="1125" loading="lazy" alt="8 cheese pizza"> <figcaption>Eight-cheese pizza</figcaption> </figure>  With two artisanal cheese units, two farmers’ markets, a <a href="https://nepalitimes.com/here-now/the-meat-of-the-story">meat processing unit</a>, a bakery, and wine bar he now envisions a vineyard so he can add Nepali wine to his repertoire. Another future plan is to start up an agri-tourism business where customers can drink, eat and work in peace. In the past 20 years in Nepal, Driard has not always succeeded in his ventures but this hasn’t curbed his enthusiasm. He is learning as he goes, and like an old wine, Nepal is growing on him. Its slowness suits his French art de vivre with eating slowly outdoors, having conversation, importing less.&nbsp; “I have proven that with even a little money you can do a lot of things in Nepal,” adds Driard. “In the West, they easily invest half a million euros on a cheese factory, I invested 10 times less.”&nbsp;

Fromage, vin et charcuterie Népalais

Bhuthan भुठान starts with Bishnu Bahadur KC played by <a href="https://archive.nepalitimes.com/article/Nepali-Times-Buzz/dhuwa-smoke-telefilm,2671">Hari Bansha Acharya</a> on a call, requesting to speak to the visa officer. By this point, he had <a href="https://nepalitimes.com/here-now/nepal-should-now-allow-visa-on-arrival">applied for a visa </a>to Bhutan 10 times, but was denied each time. KC was a <a href="https://nepalitimes.com/here-now/nepal-s-women-excel-in-sports-in-2024-z9ramyct">national football player </a>in Bhutan in 1988 before he and other Nepali-speaking Lhotsampa people were forced out of the country in the 1990s as part of the Druk regime’s ‘One Nation One People’ campaign. Over 100,000 Bhutanese Nepalis were forced out, driven across India and dumped in Nepal where they lived in seven<a href="https://nepalitimes.com/here-now/elderly-left-in-bhutan-refugee-camp"> refugee camps</a> supervised by the United Nations and other charities until they were resettled in the United States, Australia, New Zealand and some European countries starting in 2007. In the fictional movie with the satirical English title The World’s Happiest Man, KC has resettled in the state of Ohio in the US but wishes to visit his home country once before he dies. Between flashbacks, we learn KC has died without having fulfilled his wish. &nbsp; The drama then focuses on KC’s two families from two marriages as they debate whether to cremate him as per <a href="https://archive.nepalitimes.com/article/from-nepali-press/muslim-hindu,2996">Hindu rites </a>or give him a Christian burial. A mediator played by Hollywood actor Bruce Dern urges them to take a firm decision before it is too long.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250430140420_b398a08091b866da2b0b8f6c1e6e26781609749aba896bfd2c68a10a519295c3.jpg" data-media-id="editor_5" data-image-id="20250430140420_b398a08091b866da2b0b8f6c1e6e26781609749aba896bfd2c68a10a519295c3" data-rendition-name="original" width="945" height="945" loading="lazy" alt="Bhutan, the movie"> </figure>  There are drawn out scenes of KC being baptised and when he is confronted by his first wife from Darjeeling played by Anuradha Majumdar, he says he changed his religion in the hope that he will be <a href="https://nepalitimes.com/opinion/comment/bhutan-s-refugees-between-hope-and-despair">allowed back in Bhutan</a>.&nbsp; We find out KC has a second wife, a Christian Nepali played by Puja Chand. Dayahang Rai as the younger son doesn’t have much screen time to flex his acting chops. &nbsp; Acharya competently portrays a man that is equal parts haunted by the memories of and longing for his home country. KC’s pain and loss is acute when he is teaching football to Gungun but between mid-scene, he freezes, perhaps lost in memories of being in Bhutan’s national team. &nbsp; In another scene, KC recalls his mother singing a lullaby in Dzongkha. He also has a box filled with medals, photographs and a football which he deflates with a knife in a powerful depiction of his <a href="https://nepalitimes.com/here-now/searching-for-a-homeland-away-from-home?fb_comment_id=1506516030025634">complicated emotions about his homeland</a>. KC keeps checking his mailbox in the hopes that his <a href="https://archive.nepalitimes.com/news.php?id=4977">visa application</a> has been accepted. He says in Nepali: “If a tree that has already struck roots in one place is shifted to another, it will not survive.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20250430140420_4a9c27410326489576c04dedf40016bda3825e8f9663317f54fbfec4cbda6d34.jpg" data-media-id="editor_9" data-image-id="20250430140420_4a9c27410326489576c04dedf40016bda3825e8f9663317f54fbfec4cbda6d34" data-rendition-name="original" width="1422" height="2048" loading="lazy" alt="Bhutan, the movie"> </figure>  Dern’s character says that the <a href="https://nepalitimes.com/opinion/comment/nepal-s-transitional-justice-and-the-west-s-recalibration">western world</a> has become “lonely in pursuit of happiness”, another reference to Bhutan’s obsession with its Gross National Happiness index. Scenes shift quickly throughout making the story difficult to follow at times. The use of symbolism is a trite overdone. Nonetheless, भुठान is a nuanced depiction of raw pain and agony of losing one’s homeland. But one cannot help but leave the theatre feeling deflated. KC dies without having visited <a href="https://nepalitimes.com/here-now/small-bhutan-dreams-big">Bhutan</a>, but perhaps he does in his afterlife. It is up to the audience to create its own ending to this sad story of exile. भुठान Mad Monkey Films, 2025 Directed by Binod Paudel 102 minutes In cinemas in Nepal

offshore-tax-havens

Nepal’s tax system widens rich-poor gap

Supreme Court weighs in on Ncell tax dispute

A new architecture for Nepal's tourism

“Tell me what the common man is thinking!”

Fromage, vin et charcuterie Népalais

Bhutan, the movie