KATHMANDU: When Tul Prasad Biswakarma (Rajesh) of Rupandehi was elected to the National Assembly from the Rastriya Janamorcha in January 2022, he had to relocate to Kathmandu. Seeking accommodation near the Federal Parliament building in Naya Baneshwor and its vicinity, he found the housing market tight and costly. The few rooms available were priced between Rs 20,000 and 22,000 per month, far beyond what many public representatives could easily afford.

After searching for three months without finding a room, he finally found accommodation at the house of an acquaintance who is also a Member of Parliament (MP) in the Bhangal, Budhanilkantha area. He has to switch two vehicles to commute from there to the Parliament building. He pays Rs 13,000 to 14,000 in rent, and his vehicle fare alone costs him Rs 3,500 per month. Food costs him around Rs 8,000 to 9,000. Sometimes, party workers from his constituency visit, and sometimes he has to help the others. He occasionally has to place advertisements in the magazines published by his party colleagues. In this way, he spends Rs 15,000 to 20,000 per month.

MP Bishwakarma’s only source of income is the remuneration and facilities he receives from the Parliament. According to the policy of his party, Rastriya Janamorcha, the entire amount of remuneration and facilities received by the MPs is directly deposited into the party’s bank account. A lump sum Rs 80,000 per month for one MP is transferred from the Parliament Secretariat to the party’s account. From this, after deducting 50 percent as the levy or ‘support amount,’ the party hands him only Rs 40,000. This amount barely covers his monthly expenses. He says, “That levy was fixed due to the party’s needs, and there is no room to complain about it. The condition of the country and the people is not good, so we are not in a position to demand an increase in facilities.”

Bishwakarma openly expressed his distress, but most MPs, despite their suffering, do not want to speak out. MPs from various parties who spoke to Nepal News complained that it is difficult to manage expenses when the party takes a large amount of money in the name of a levy from their salary. However, none of them speak openly about it. A female MP from CPN (UML), who did not want to be named, says that parties forcibly collect money in the name of a levy from elected officials ranging from ward members to ministers. She says, “A large amount of money is spent when running for election, and after winning, the party takes away the remuneration itself. This is also a major reason for the increase in corruption in Nepal, but if we speak about this within the party, it is difficult to survive. We are slaves to the party.”

A lump sum of Rs 80,000 per month for one MP is transferred from the Parliament Secretariat to the party’s account. From this, after deducting 50 percent as the levy or ‘support amount,’ the party hands him only Rs 40,000.

According to Kunta Sharma, who was elected as a member of the House of Representatives in 1999, MPs at that time received a salary of Rs 22,000, at least 10 percent of which had to be paid to the party as a levy. Currently, the UML collects Rs 12,000 per month as a levy from its federal MPs. According to the Parliament Secretariat data, the UML collects Rs 1.56 million every month as a levy from a total of 88 MPs (78 from the House of Representatives and 10 from the National Assembly). After the dissolution of the House of Representatives, only the National Assembly remains now.

It’s not just MPs; parties collect levies from ministers, elected representatives of District Coordination Committees and local levels, and officials appointed to various positions on the party’s recommendation. Sabitra Rai, Deputy Chief of the Dhankuta District Coordination Committee, has to pay Rs 5,000 to the party every month as a levy. This amount is cut directly from her salary and deposited into the party’s account. Besides the levy, she has to contribute to party programs for youth, women, and journalists. She complains that sometimes her salary is not enough because of these expenses.

These are instances that illustrate how parties treat their elected representatives and leader-workers in the name of a levy and how much trouble they cause. When the levy is made mandatory rather than voluntary, on the one hand, it puts financial pressure on the representatives, and on the other hand, there is a risk that they might turn towards improper financial activities because their salary is insufficient.

Recently, Prime Minister Sushila Karki also sharply criticized the issue of party levies. Addressing a program organized by the Federation of Nepalese Chambers of Commerce and Industry on September 7, Prime Minister Karki presented a few points, stating that the Gen Z protest has established a clear limit or boundary on what is acceptable and what is unacceptable in the country. She said, “This is a clear message from the youth: corruption, party levies, and the commission network are not acceptable.”

Ignored by statute, enforced by faction

What the prime minister called ‘party levies’ is the main source of income for running the organization of political parties. However, the law does not recognize the right of parties to collect a levy. It is nowhere mentioned in the law. Instead, the Political Parties Act, 2017, addresses membership and renewal fees. The Act mandates that these fees must be mentioned in the party’s statute. However, most parties have not clearly mentioned this in their statute. They state that it will be as specified in the rules. Janamat Party, however, has mentioned ordinary membership, active membership, and renewal fees in its constitution.

Even though the law does not recognize it, parties are confidently making the levies collected from their MPs and political appointees their source of income. Although they take money in the name of a levy, parties often mention it under other names in their reports, rather than under this specific heading. UML’s audit report for the fiscal year 2021/22 mentioned collecting Rs 2.531 million from political appointments.

According to the Parliament Secretariat data, the Nepali Congress collects Rs 1.40 million monthly at the rate of Rs 10,000 from a total of 104 MPs (88 in the House of Representatives and 16 in the National Assembly). Similarly, the then CPN (Maoist Centre) used to collect Rs 588,000 monthly at the rate of Rs 12,000 from a total of 49 MPs (32 in the House of Representatives and 17 in the National Assembly). The Rastriya Swatantra Party (RSP) collects Rs 330,000 monthly at the rate of Rs 16,500 from 20 MPs. The Rastriya Prajatantra Party (RPP) collects Rs 260,000 monthly at the rate of Rs 20,000 from 13 MPs. The then CPN (Unified Socialist) collects Rs 216,000 monthly at the rate of Rs 12,000 from 18 MPs. The Janamat Party used to collect Rs 132,000 at the rate of Rs 22,000 from 6 MPs.

The Political Parties Act, 2017, addresses membership and renewal fees. The Act mandates that these fees must be mentioned in the party’s statute. However, most parties have not clearly mentioned this in their constitutions.

Furthermore, the Nagarik Unmukti Party collects Rs 60,000 monthly at the rate of Rs 15,000 from four MPs. The People’s Socialist Party collects Rs 105,000 at the rate of Rs 15,000 from seven MPs. The People’s Socialist Party Nepal collects Rs 120,000 at the rate of Rs 15,000 from eight MPs. The Loktantrik Samajwadi Party collects Rs 75,000 monthly at the rate of Rs 15,000 from five MPs, and the Nepal Socialist Party (NSP) collects a levy of Rs 12,000 from one MP. Former Chief Election Commissioner Bhojraj Pokharel says that while it is common for parties to collect levies from their workers, collecting levies based solely on political appointment or being elected as a representative is unusual. He says, “Collecting a levy is normal, but because they collect it under various names, questions are repeatedly raised about the financial transparency of the parties.”

Article 29 of the Nepali Congress constitution provides for the party’s fund. However, it mentions only three sources of party income: membership and membership renewal fees, funds received from members as specified, and miscellaneous income.

Article 69 of the Nepali Congress constitution mandates the compulsory payment of levies as specified. Accordingly, Rule 23(5) of the Rules states that 20 percent of the monthly remuneration received by party members elected, nominated, or appointed to public benefit positions, including those appointed to the Federal Council of Ministers, members of the Federal Parliament, those appointed to the Provincial Council of Ministers, Provincial Assembly members, chiefs and deputy chiefs of District Coordination Committees, Municipalities, and Rural Municipalities, and other politically appointed or nominated members, must be mandatorily paid to the party. At least 10 percent of the monthly remuneration received by members of the District Coordination Committee and Ward Chairpersons of Rural and Municipalities, and five percent of the monthly remuneration received by Ward Members of Rural and Municipalities and Executive Committee members, must be mandatorily paid to the party.

The Nepali Congress Rules, 2019, stipulate that ministers and MPs must pay the levy to the respective parliamentary party. The rules also allow the parliamentary party to stipulate an additional support amount from them.

Similarly, Chapter 2 of the UML Rules, 2021, provides for the payment of levies by elected representatives from the party and individuals receiving political appointments on the recommendation of the party. For this, the federal, provincial, district, and local level committees are authorized to set the levy.

The constitution of the then Maoist Centre allows for the collection of a levy for the party’s fund. Sub-article 1(a) of Article 63 of the constitution allows for the collection of membership fees and levies as specified.

The constitution of the RSP states that membership and renewal fees will be as specified in the rules. In the fiscal year 2023/24, out of the RSP’s total income of Rs 37.95 million, Rs 26.15 million was collected under the headings of membership, levy, and renewal alone. The RSP initially collected Rs 25,000 per month as a levy from its federal MPs, but after complaints within the party that the amount was too high, it has currently been reduced to Rs 15,000. Santosh Pariyar, Chief Whip of the RSP, says that as they are a new party with limited resources, they have been compelled to take a higher levy from the MPs.

Article 54 of the RPP constitution states that the party’s fund will be operated through membership fees, regular donations and support received from members, funds received from operating various programs, and support received from various organizations or individuals. The constitution does not contain a clear provision for taking money as a levy from MPs, other representatives, or appointees.

The constitution of the RSP states that membership and renewal fees will be as specified in the rules. In the fiscal year 2023/24, out of the RSP’s total income of Rs 37.95 million, Rs 26.15 million was collected under the headings of membership, levy, and renewal alone.

RPP Nepal, however, has included the levy as a source in its fund. The Janamat Party’s constitution provides that every active member must voluntarily provide regular financial support (levy). In the fiscal year 2023/24, Janamat collected Rs 11.73 million under the headings of membership, levy, and renewal. Of this, Rs 7.73 million was income from the levy. That is, the levy is the biggest source of income for Janamat.

Unhealthy ripple effect

Collecting a levy from leaders and workers is considered normal not only in Nepal but also elsewhere. However, in Nepal, there is a wrong practice where governing bodies cut the levy from the remuneration received from the state treasury by elected representatives, ministers, MPs, and officials appointed at various levels, and send it directly to the parties’ accounts. There is no clear legal provision for this matter.

The practice by the Federal Parliament Secretariat of sending MPs’ levy amounts directly to the party’s account has also spread to the provinces. Provincial Assembly Secretariats also send the MPs’ levy amounts to the party’s accounts. According to Gautam Raj Amatya, spokesperson for the Koshi Provincial Assembly Secretariat, initially, the levy of the provincial MPs was not deposited into the party’s account. After becoming aware of the Federal Parliament Secretariat’s practice, they started doing the same here. He says, “Whatever the Union does above, the same practice is adopted in the province. When the province was established, federal employees came and taught us the working methods.”

Amrit Kumar Shrestha, an associate professor at Tribhuvan University, says it is unnatural for the Parliament Secretariat to cut the salary of MPs and send the money to the party’s account. He says, “The Parliament Secretariat can deduct and remit state tax, but it cannot cut the salary and deposit it into the party’s account.”

MPs, ministers, or officials of other bodies receive salaries and facilities from the state treasury, that is from taxes paid by citizens. Parties send letters to the Parliament Secretariat requesting that their MPs’ levy amount be sent to their account. The Parliament Secretariat cuts the amount from the remuneration received by the MPs and sends the money directly to the party’s account.

Like the Parliament, other bodies also send the money directly to the party’s account. That is, parties have arranged for the money to be sent directly to the party’s account, not even trusting their own workers. Whereas, the Political Parties Act does not provide for sending the levy amount to the party’s account in this manner. Eakram Giri, spokesperson for the Federal Parliament Secretariat, says that the parliamentary party sends a letter with the consent of the MPs, and based on that, the levy amount is deposited into the party’s account.

Pariyar, Chief Whip of the RSP, says that since the levy and membership fees are the source of income for the parties, this should not be taken otherwise. He says, “Parties take levies from their workers with their consent. This should be considered natural.”

Amrit Kumar Shrestha, an associate professor at Tribhuvan University, says it is unnatural for the Parliament Secretariat to cut the salary of MPs and send the money to the party’s account.

In Nepal, communist parties used to collect levies from workers even during the underground period. After 1992, they started collecting a fixed percentage of the salary as a levy from their workers elected to the House of Representatives and the National Assembly. Then, other parties also started this practice, as mentioned by CPN (UML) leader Raghuji Pant in an article. He argues that since the Secretariat sends the money to the party’s account with the approval of the MPs, this should not be considered otherwise.

Research conducted by the Policy Research Institute on ‘The Role of Political Parties for the Institutional Development of Democracy’ found that although parties collect donations, forced collections, and fees through NGOs, donors, privatization of public assets, and promotion of officials from businessmen and workers, the audit reports only mention membership fees as the source of the party’s income.

According to a study by Shekhar Parajuli of the Democracy Resource Center, a federal MP in Nepal has monthly expenses of around Rs 100,000. According to him, it takes them 28 years to recover the expenses incurred during five years as an MP. He says that MPs commit improper acts to recover their own investment. He says, “The income sources of parties do not appear transparent. Even if there is a provision for collecting a levy, deducting it directly from the state treasury does not seem appropriate. The levy needs to be voluntary, not mandatory.”