Kathmandu: In a development that has intensified public scrutiny over political accountability and financial transparency, Sudhan Gurung, who resigned as Nepal’s Home Minister just days after facing mounting criticism over alleged ties with controversial businessmen Sulabh Agrawal and Deepak Bhatta, has now been found to have paid no income tax for over a decade.
The revelation has sparked serious questions about the legitimacy of his wealth, despite his public disclosure of assets worth tens of millions of rupees.
Gurung stepped down from his ministerial post on Wednesday, only four days after the allegations surfaced linking him to individuals under investigation for money laundering. While announcing his resignation, he framed the move as an act of moral responsibility, but subsequent findings have added a new dimension to the controversy.
According to records of advance tax deductions obtained by Clickmandu, Gurung has not paid a single rupee in tax since acquiring his Permanent Account Number (PAN) twelve years ago. From the fiscal date corresponding to mid-July 2013 to late April 2026, his tax records show a striking zero.
This absence of tax payments stands in stark contrast to the scale of wealth Gurung has declared. In his official asset disclosure submitted after assuming office, he listed significant holdings in land, shares, and business investments. His PAN number, cited in the declaration, shows no trace of tax payments related to income, capital gains, or investment returns. This discrepancy has raised serious concerns, as individuals with such financial profiles are typically expected to have substantial tax liabilities.
The scale of his financial growth has drawn scepticism, prompting questions about how such wealth was accumulated without corresponding tax contributions
Gurung’s declared investments include shares worth approximately 3 million rupees in Hope Holdings, 5.7 million rupees in Lagum Premium Apartments, over 27.4 million rupees in the secondary stock market, and 7 million rupees in Adventure Villa. In addition to these financial assets, he reported owning 89 tolas of gold, five kilograms of silver, and cash deposits totalling over 6.1 million rupees across three banks. He also disclosed the purchase of a vehicle worth nearly 4.8 million rupees under the name of Lagum Premium Apartments. Altogether, these assets point to a high-net-worth profile that would ordinarily generate taxable income through dividends, capital gains, or interest earnings.
Despite this, Gurung has maintained that the primary source of his wealth is ancestral property. Originally from a modest family in Gorkha, he rose from working as a nightclub DJ to leading a non-profit organization called “Hamro Nepal.”
The scale of his financial growth has drawn scepticism, prompting questions about how such wealth was accumulated without corresponding tax contributions. Responding to critics earlier, Gurung stated that the origins of his wealth could be verified through documents and bank records, insisting that speculation should not replace evidence. However, the absence of any tax payments undermines claims of financial transparency.
The controversy deepened further when it was revealed that Gurung held shares in companies that had obtained licenses under questionable circumstances, allegedly influenced by Agrawal and Bhatt. Critics questioned why these holdings were not disclosed earlier and whether his relationship with the businessmen constituted a conflict of interest. Facing mounting pressure, Gurung resigned just 27 days after taking office and called for an impartial investigation into the matter.
Additional reports indicated that Gurung owned 50,000 shares combined in Star Micro Insurance and Liberty Micro Life Insurance, both companies whose licensing processes have been widely criticized. The fact that these entities are linked to individuals under money laundering investigation has amplified suspicions of collusion.
Moreover, both Bhatt’s Infinity Holdings and Agrawal’s Shankar Group are known to have been major donors to Gurung’s non-profit organization, further highlighting longstanding ties between them. Gurung had even publicly honored these companies for their financial contributions during the COVID-19 pandemic, reinforcing perceptions of a close relationship.
The political fallout was swift. Prime Minister Balen Shah reportedly asked Gurung to step down and sought clarification from him as the controversy escalated. Gurung’s resignation, while framed as voluntary, came amid growing demands for accountability from both the public and political observers.
The revelation of a zero-tax record over such an extended period raises broader questions about Nepal’s tax compliance system and enforcement mechanisms. In Nepal, individuals are required to pay direct taxes on various forms of income, including salaries, business profits, rental income, capital gains, interest, dividends, and even windfall earnings such as lottery prizes. These taxes are typically tracked through the PAN system, which serves as a unique identifier for taxpayers.
Tax collection often operates through a system known as Tax Deducted at Source (TDS), where employers, banks, or financial institutions deduct taxes before payments are made to individuals. For instance, salaries are taxed according to progressive income slabs, bank interest is taxed at six percent, and dividends at five percent. Similarly, capital gains from the sale of shares or property are subject to varying rates depending on the holding period and asset type.
Given this framework, it is unusual for someone with significant financial activity to have no tax record. However, tax experts note that there could be several explanations. One possibility is that Gurung may not have had formal employment or income sources that trigger TDS. If he operated primarily in informal sectors, such as freelance work, small-scale businesses, or cash-based transactions, his earnings might not have been captured in the tax system.
Another explanation could be administrative lapses. In some cases, employers or financial institutions fail to properly report TDS against an individual’s PAN, resulting in incomplete records. Similarly, taxes paid through local governments, such as rental income tax, may not always be reflected in the central tax portal. There are also instances where capital gains taxes collected during property transactions are not immediately synchronized with the PAN database.
In Nepal, agricultural income and inherited property are exempt from taxation, and some individuals exploit these provisions to justify large, untaxed wealth
Nevertheless, these explanations appear insufficient when weighed against the scale of Gurung’s declared assets. Experts suggest that a prolonged absence of tax records, combined with visible wealth accumulation, may indicate deeper issues such as underreporting of income, use of informal financial channels, or even deliberate tax evasion. In some cases, individuals conduct transactions in cash to avoid documentation, or understate property values during registration to reduce tax liabilities, with the remaining amount exchanged off the books as “black money.”
Another common practice involves conducting all financial activities under a company’s name while maintaining a personal PAN with minimal activity. If an individual does not draw a salary or dividends from the company, their personal tax record may appear empty, even if they benefit indirectly from the company’s resources. This raises questions about whether Gurung’s financial dealings were structured in a way that minimized his personal tax exposure.
In Nepal, agricultural income and inherited property are exempt from taxation, and some individuals exploit these provisions to justify large, untaxed wealth. By claiming that assets were acquired through farming or ancestral inheritance, taxpayers can avoid scrutiny, even if the actual sources are different. Gurung’s assertion that his wealth is primarily ancestral falls into this category, but without clear documentation, such claims remain difficult to verify.
Ultimately, the case highlights the challenges Nepal faces in ensuring financial transparency and accountability among public officials. When a high-ranking government figure with substantial assets is found to have no tax record, it not only raises legal concerns but also undermines public trust in institutions. Whether Gurung’s situation is the result of systemic gaps, personal oversight, or deliberate evasion will likely be determined through further investigation. For now, the episode serves as a stark reminder of the importance of robust tax enforcement and ethical standards in public life.
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