Impose inheritance tax to change policy



The split of political parties is widely discussed in Nepal as if it were something foreign to societal norms. However, the way political parties behave is a reflection of the society in which we live. Our societies have always known family feuds, and they usually revolve around ancestral assets in the form of land and property, land being the most important of these. It is rare to see a family where there has not been a family feud over property for the past three generations. We grew up learning about how my grandfather’s family took away the family possessions, and our father and his brothers were alone. When it happened again, we stopped talking to one of my uncles after he took all the assets and left us with nothing.

We brothers and sisters thought it was important to start with ourselves rather than fighting for family possessions, and now we don’t think that is a bad idea. I don’t know what my life would have been like if I had inherited property and could have lived off the rental income. Was myself or my siblings also hardworking and would push ourselves hard? Our society is a society where life revolves around heritage. Previously, the law excluded women from the inheritance of parental property. No wonder Nepalese women are more hardworking than Nepalese men because they are not sure that they will inherit the wealth from their parents or husbands.

Weddings and funerals

The struggles for family property, especially land, are part of all discussions at large family reunions. We remember weddings and funerals where there were clashes between different families. I have vivid memories of people arguing over who should light the funeral pyre at cremation ghats, as society determines family relationships based on who attends the funeral and lights the pyre. You will see warring brothers fighting together for family wealth as kriya putra (grieving son) even though they are not on good terms. It is not uncommon to see brethren who fought with their fists in front of hundreds seated together in death rituals. Family members who have been fighting in court for decades can be seen posting grand obituaries in newspapers. They are all doing this because there is a legacy to look forward to. The disintegration of wealth among the Rana families, perhaps the wealthiest rulers in South Asia, can be attributed to struggles for assets between different branches of the family. Only those who chose to bring in professionals or keep family communications open and legal survived.

This feeling of struggle within families is reflected in our political parties. It is rare to see a political party that has not had such fights. Even the new ones are fighting because the party leadership is seen as a legitimate legacy, which means they are like family members fighting over the legacy.

If you have inherited land, especially in urban centers in Nepal, the usual practice is to rent it out. With land prices skyrocketing, there are many Nepalese billionaires in terms of land value. There is no incentive to become an entrepreneur. They start businesses because everyone else is doing it. They don’t have to think like business is about identity; and if it folds, it’s not your hard-earned money that you’ve lost. An ancestor won it for you. Therefore, it is important to tax inheritance heavily so that what happens to one is not guaranteed, and you have to work hard from the start of life like in many countries around the world.

People ask why the second generation Nepalese children in the US are doing so well, or some of the young people who started ICT businesses in Nepal have thrived, and the answer for the majority would be the same. They started out on their own with no inheritance or left their families to be independent. If we were to survey women (daughters or daughters-in-law) under 30, many would say they would choose an independent nuclear life instead of being in families where in return for an inheritance you have to trade your independence.

More open spaces

The economic growth of Japan and South Korea can be attributed to their respective inheritance taxes of 55% and 50%, as people do not wait for the death of their parents to inherit their wealth. Of course, there must be a threshold above which this should apply. In addition, writing a will and registering it with the proper authorities should be made mandatory for all who own assets, as we need to appoint a nominee for bank accounts and corporate actions in the event of death. It will also reduce the number of disputes after the death of the owner of the asset.

In Nepal, a high inheritance tax can also lead to more open spaces. With more and more Nepalese moving abroad, working in Nepal becomes just another bonus for them. So if there is inheritance tax, they wouldn’t mind if the local government took over their assets and gave them the after-tax money. In Boulder, Colorado, the local government buys such homes and dismantles them, creates more open space, and raises house prices in the neighborhood, resulting in more taxes. In Patan, we see so many abandoned houses in clusters which are for the most part disputed. They can be taken up to create open creative spaces that can also generate income.

It is important to examine this question in depth if we are to resolve our political landscape over the next decade. We must ensure that the next generation of political leaders champion the cause of inheritance rights to secure their own political future. Otherwise, in the 22nd century, we will speak of 150 years of split and unification of different parties as in families.


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