The Supreme Court has issued an interim order preventing the implementation of the government’s decision to grant tax exemption to Dolma Impact Fund (DIF), stating that such a move could result in irreparable loss to state revenue. A joint bench of Justices Mahesh Sharma Paudel and Balkrishna Dhakal, in an order dated February 11, upheld the short-term interim order previously issued on January 8. Acting on a proposal by Finance Minister Rameshore Prasad Khanal, the government had decided to exempt DIF from income tax. The fund had brought investment into Nepal through a shell company registered in Mauritius, a known tax haven, and has invested in 16 Nepali companies. Challenging the decision, Bhesh Raj Luintel filed a writ petition at the Supreme Court, arguing that the exemption would harm state revenue. In its order, the apex court stated that the decision by the Director General of the Inland Revenue Department (IRD) was inconsistent with existing laws. The court clarified that DIF is not eligible for exemption from capital gains tax and must pay tax in accordance with prevailing legal provisions.
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