The most criticized and talked-about issue during the parliamentary practice after 2046 BS was the ‘Pajero Scandal.’ That is, the tax exemption facility provided to MPs, members of constitutional bodies, and high-ranking government employees and officials for the purchase of vehicles. This became widely known as the ‘Pajero Scandal.’

Between 2052 and 2054 BS, in the process of pleasing MPs during the game of saving and toppling governments, they were granted the facility to import vehicles with customs exemptions. The government lost hundreds of millions of rupees in revenue by providing this facility.

What was remarkable was that MPs under the multiparty system gave speeches in parliament demanding the same facility that had been provided under the Panchayat system. Due to pressure from MPs and the wishes of the political leadership, the cabinet meeting led by Sher Bahadur Deuba on 29 Magh 2052 BS granted the facility to import vehicles with tax exemptions. The decision also included the facility of dollar exchange based on the price of the vehicle, which was widely criticized at the time. Among the many scandals that took place as part of the game to keep the prime minister in power by pleasing MPs, the decision to provide vehicle facilities was heavily criticized by the public.

Ignoring the criticism, by Baisakh 2055 BS, 210 MPs and 205 officials and employees had already imported vehicles under the facility without paying government revenue. MPs were given a 90 percent exemption on customs and sales tax for vehicles worth up to 1 million rupees. Similarly, vehicles worth up to 2 million rupees received an 80 percent exemption, and those above that price received a 50 percent exemption. Constitutional bodies and employees were given a 92 percent exemption.

Employees were allowed to purchase vehicles worth up to 10,000 US dollars, but there was no such limit for MPs. Among the MPs, Sharad Singh Bhandari purchased the most expensive Land Rover. Employees imported Nissan and Toyota cars. On average, they received a benefit of 900,000 rupees. MPs with a preference for Pajero and Prado received a tax exemption of 1.9 million rupees on customs and sales tax.

The news that Pajero, Land Cruiser, and Nissan Toyota cars had been imported caused even more public outrage. The fact that MPs without financial means imported Pajero vehicles with the money of the wealthy further tarnished the political environment. To quell the opposition, after Surya Bahadur Thapa resigned and Girija Prasad Koirala became prime minister in Chaitra 2054 BS, the cabinet itself revoked the decision to allow vehicles to be imported under the facility. However, by then, the issue of revenue lost during the purchase had become a major topic of discussion. Yet, government agencies were reluctant to make public the amount of revenue lost from the purchase of 415 vehicles. Nevertheless, according to information obtained from sources, nearly 550 million rupees in revenue was lost due to the tax exemption facility for vehicle imports.

Widespread Misuse of Government Vehicles

MPs, ministers, and government employees who purchased vehicles under the facility were misusing government resources by taking double benefits. Although the Koirala cabinet decided to instruct the relevant agencies to monitor and retrieve misused vehicles, the decision could not be implemented.

Bharatmani Risal, then Director General of the Central Service Department, stated that those who purchased vehicles under the facility should not take government vehicles. However, some MPs and ministers used both facility and government vehicles by leveraging their political influence. MPs who had left ministerial positions also misused vehicles. Even after the formation of a new government, 11 former ministers had not returned their vehicles.