After a week of presenting the federal budget for the next fiscal year 2023/24, Dr. Prakash Saran Mahat finds himself surrounded by questions over the alleged involvement of an outsider in the budget-making process. On Tuesday, the House of Representatives (HoR) got rocked by the lawmakers of opposition parties who claimed that an individual who was not related to the process was involved in changing the tax rates during the finalization of the budget draft on the eve of the budget speech on May 29. The lawmakers of CPN-UML, Rastriya Swatantra Party, Rastriya Prajatantra Party, as well as the ruling Nepali Congress, questioned the government and Finance Minister Dr. Mahat over the involvement of an unauthorized person (retired staff of the Finance Ministry) in changing tax rates as well as increment in tax on electric vehicles (EVs). They also demanded a parliamentary probe over the matter. The meeting of HoR began three hours late of schedule and once the meeting convened, opposition lawmakers protested over the 'violation' of budget formulation rules. They questioned how an unauthorized person had access to a confidential chamber in the Ministry during the budget drafting process.

The UML Chief Whip Padam Giri sought a reply from the finance minister, saying that the changes in tax rates in the budget have come at the behest of certain corporate groups.

Rastriya Swatantra Party lawmaker Dr. Swarnim Wagle underscored the need of breaking the nexus of policy corruption. He reminded the House that the then Finance Minister had to resign upon facing the same kind of charge in the change of tax rates last year. "Has the tax rate been subverted in a conspiratorial manner to benefit certain business houses?", Dr. Wagle asked the finance minister, "We need an answer as to whether the methods and procedures have been duly followed in the work related to the HS code." Last year, the then Finance Minister Janardan Sharma was forced to resign after allegations that he allowed two unauthorized persons to change tax rates, a day before he presented the national budget in Parliament. The tax rate is generally finalized on the last day of budget making, in the meeting attended by the Finance Ministry, Finance Secretary, Director General of the Internal Revenue Department, and Director General of the Customs Department only. Responding to the lawmakers, Finance Minister Dr. Mahat said that there was no involvement of an outsider in changing the tax rates during the preparation of the budget. After lawmakers questioned him citing media reports of a former employee of the Finance Ministry involved in changing the tax rates, Mahat claimed that no unauthorized person has access to change the tax rate. "The same person, who has been typing the Harmonization Code (HS) in the tax rates since the past, was involved in this budget," said Mahat. "Retired non-gazetted first-class staffer Ram Krishna Shrestha was appointed before I became the finance minister," said Mahat, "His job was to make entries in HS Codes following the orders of the officials involved in the decision-making process. He has made entries as dictated by the officials who were present in the decision-making process." Speaking to the media, Shrestha, a former staff of the Department of Customs, has said that he has worked as a typist during the preparation of the budget for many years. Lawmakers also questioned the finance minister over the alleged leakage of information on the tax structure of EVs. The federal budget for FY 2023/24 has increased the tax on EVs of 50-100 KW motor capacity while lowering the tax on EVs above 100 KW. And, anticipating the government move, EV dealers were quick to import over 1,000 EVs of 100 KW capacity just ahead of the budget presentation. According to officials at the Department of Customs, the majority of EVs imported in the last two weeks are 100 KW EVs. While the current fiscal year budget favored EVs up to 100 KW, the new budget has supported EVs above 100 KW that are considered expensive in the market. The new budget has imposed a 5 percent customs duty and 10 percent excise duty on electric vehicles of 50-100 KW, while it reduced the customs duty and excise duty on electric vehicles of 100-200 KW. Similarly, the customs duty has been reduced by only 5 percent for EVs having 200-300 KW capacity. Ahead of the new budget, the EV dealers (a group of importers who sell EVs up to 100 KW) strongly lobbied with the government urging the Finance Ministry not to change the tax structure. Another group of dealers selling above 100 KW EVs and fuel engine vehicles asked for increasing tax on EVs up to 100 KW.