{"id":17808,"date":"2026-05-31T07:51:03","date_gmt":"2026-05-31T02:06:03","guid":{"rendered":"https:\/\/eng.dragonmedia.com.np\/?p=17808"},"modified":"2026-05-31T07:51:03","modified_gmt":"2026-05-31T02:06:03","slug":"nepal-slaps-5-vat-on-electricity-and-ride-sharing-kulman-ghising-voices-opposition","status":"publish","type":"post","link":"https:\/\/eng.dragonmedia.com.np\/?p=17808","title":{"rendered":"Nepal Slaps 5% VAT on Electricity and Ride-Sharing, Kulman Ghising Voices Opposition<\/strong>"},"content":{"rendered":"

Kathmandu \u2013 The government is set to impose a 5 percent Value Added Tax (VAT) on electricity and ride-sharing services starting from 1 Shrawan (mid-July). With the announcement made by Finance Minister Swarnim Wagle in Friday’s budget speech, Nepal will now have three VAT rates: zero, 5, and 13 percent. However, the government has not formally termed this a “multiple rate” system.<\/p>\n

According to Director at the Inland Revenue Department Shiv Sharma, since the law still provides for a single rate, the 5 percent levy is being introduced as a “reduced rate.” But Chartered Accountant Umesh Pandey argues that with the government publishing a notice in the gazette to implement multiple rates, it is now set to take effect.<\/p>\n

Under the new provision, households consuming more than 50 units of electricity per month will have to pay 5 percent VAT. For instance, if someone uses 200 units a month, VAT will apply only to 150 units, Sharma clarified. While businesses can claim VAT refunds, individual consumers cannot.<\/p>\n

The ride-sharing market in Nepal is estimated to handle annual transactions worth around 20 billion rupees. Platform operators will be required to collect and remit VAT when taking commissions from riders. While riders themselves do not need to register for VAT, the platforms must. However, CA Pandey pointed out an inconsistency: hailing a taxi on the street incurs no VAT, yet booking one through a ride-sharing app does, suggesting the need for further study.<\/p>\n

Former Energy Minister and ex-Executive Director of the Nepal Electricity Authority, Kulman Ghising, has strongly opposed the decision to tax electricity. He called it contrary to consumer interests, the goals of energy transition, and the national campaign to boost the use of domestically produced clean energy. “Since 2016, while at the Authority, we reduced electricity prices by 25 percent to encourage domestic consumption,” Ghising said. “But now, when the government should be pushing for greater consumption, it has instead punished consumers with a VAT.” He warned that most of those exceeding 50 units per month are ordinary households, and the added tax will increase monthly expenses for millions of families, making cooking costlier. Ghising has demanded the government immediately withdraw the additional 5 percent tax.<\/p>\n

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