Key Tax Changes in Nepal’s FY 2082/83 Budget
Finance Minister Bishnu Prasad Paudel has just announced the national budget—and it comes with some big tax changes. Whether you’re a small business owner, an entrepreneur, a digital service provider, or just someone curious about how your money is affected, this is for you.
Let’s break it down. Simple. Direct. And in your language.
More Taxes on Cigarettes and Alcohol
If you enjoy the occasional drink or smoke, you’ll be paying more from now on. The government has raised customs and excise duties on alcohol, beer, tobacco, and cigarettes. This is part of a bigger plan to increase revenue and promote healthier habits.
Startups and IT Exports Get Big Tax Breaks
Are you running a startup or working in IT? Good news!
- Startups making up to NPR 10 crores a year won’t pay income tax for 5 years.
- If you’re exporting IT services, you’ll only pay 5% income tax, and that’s final.
- Exporters of IT services also get 75% income tax exemption.
This is a huge boost if you’re working with clients abroad or building digital services from Nepal.
Support for Women Entrepreneurs
The budget includes special facilitation measures to encourage more women-led businesses. While exact details are pending, this is a positive signal for empowering female entrepreneurs in Nepal.
Tax-Free Imports for Green and Agri-Tech Industries
If you’re in renewable energy, agriculture, or environmentally friendly production, you’re going to love this:
- 100% tax waiver on importing machinery for:
- Green hydrogen production
- Organic/natural fertilizer production
- EV charging stations
- Wood seasoning industries
- Solar and wind energy battery storage
- Plus, these industries will enjoy income tax exemptions of up to 6 years.
Boost for Sports Infrastructure
Planning to build a football field or stadium?
- You’ll pay just 1% customs duty on importing sports equipment.
- All other import taxes? Gone.
Old Vehicles and Electric Vehicles
- If your car is 20+ years old and you’ve paid income tax for the past two years, your remaining tax will be waived.
- All taxes and duties on electric vehicles remain unchanged—they’re still favorable to promote EV adoption.
Tunnel Tech & Infrastructure Projects
To support better infrastructure:
- Only 1% customs duty on tunnel boring machines for road, hydro, and irrigation projects.
- All other related duties are waived.
Digital Economy Gets a Push
- VAT on digital payment settlement services is gone.
- The Digital Service Tax will now cover more online services and platform-based businesses.
Food Imports Made Easier
- No more advance income tax on customs points for food grains, legumes, dairy, fruits, or plant-based/animal-based goods.
- This should help keep prices down and make importing food products smoother.
VAT Removed on Hearing Aids
For those who are hearing-impaired or care for someone who is, this is meaningful—no VAT on hearing aids anymore.
What You Can Bring While Traveling
- You can now bring up to USD 5,000 in foreign currency or traveler’s cheques without needing to declare it at customs.
- Anything above that? You must declare.
No Limit on Ambulance Import Prices
Previously, ambulances had a tax-free import cap of NPR 16 lakhs. That limit has been scrapped.
Missed Taxes? You Can Now Settle
If you:
- Haven’t submitted tax returns
- Owe VAT or excise tax
…You can now file and pay without the usual interest, penalty, or late fees. This is a second chance to get compliant without being punished.
Expansion of the Tax Net
The government wants more people in the tax system, but they’re also trying to make it easier:
- E-invoice monitoring system is expanding.
- New digital tools will make tax filing more paperless, contactless, and faceless.
- Voluntary tax participation and education will be promoted.
Fighting Tax Fraud and Revenue Leakage
Nepal is cracking down on revenue loss through:
- Stronger info exchange with neighbors
- Intelligence-based tax investigations
- Automated systems to make customs valuations more realistic
Customs Simplified, Trade Made Easier
- No more extra entry fees or permits at local levels once customs is paid at the border.
- EXIM code bank guarantee of NPR 3 lakhs? That’s been removed.
- If you have zero taxable income, you don’t need to pay minimum tax anymore.
- Selected professionals will get fast-track and on-site inspection services.
Automated Price System for Imports
Forget outdated customs references. A new automated global pricing database will soon replace it, ensuring fairness and reducing corruption.
Big Picture: The Government’s Revenue Goal
All these tax reforms—42 changes in total—aim to help the government collect NPR 19 Kharba 64 Arba in revenue for the new fiscal year.
They also want to make the tax system smarter, fairer, greener, and more digitally connected.
Final Thoughts
This year’s budget is a mixed bag. Higher taxes on harmful products, but significant relief for tech, startups, and green industries.
If you run a business, work in exports, or are planning a new venture—now’s a great time to explore your tax benefits.
Let’s hope these changes actually simplify your experience and don’t just look good on paper.
Need help understanding how these apply to you? Talk to a tax advisor or keep an eye on official updates as rules get implemented.