Government of Nepal raises taxes on import of entry-level Electric Vehicles

Government raises taxes on import of entry level Electric Vehicle in Nepal
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The Government of Nepal (GoN) has just unveiled the budget for the fiscal year 2080/81 and there are a few interesting points regarding the Electric Vehicle (EV) that catches interest. The new budget brings new tax provisions for the import of EVs based on the size along with a policy to expand the network of charging stations in Nepal.

Revisions on Import Tax for EVs in Nepal

Former Finance Minister, Paudel, highlighted Nepal’s goal to replace fuel-powered light vehicles with electric vehicles by 2031. This strategic plan attempts to reduce fuel imports and the pollution they result in. However, given the excise and customs duties, it is unclear whether Nepal would embrace electric cars (EVs) entirely.

While there is a slight increase in taxes for entry-level EVs, taxes on high-end electric vehicles dropped, making them attractive and luxury options. On the positive side, custom duty and excise duty on EVs with power ranges of 101 to 300 KW has been decreased from the previous fiscal year. This decision could encourage people to switch to electric vehicles.

Let’s compare the custom and excuse duty on EVs from the previous year to this year.

EV Categories Tax Policy for FY 2080/2081 Tax Policy for FY 2079/2080
Excise Duty Customs Duty Excise Duty Customs Duty
Upto 100 KW 10% 15% 0% 10%
101-200 KW 20% 20% 30% 30%
201-300 KW 45% 40% 45% 45%
301 KW & above 60% 60% 60% 60%

Thus, with recent tax policy changes, a trend of customer preference toward luxury electric vehicles (EVs) could be on the rise. While the government formerly contrasted luxury vehicle imports, recent tax changes are reviving interest in high-end electric vehicles. The government is giving a clear message of encouragement to potential consumers by creating a more favorable environment.

The ambitious Nepalese goal to switch to electric vehicles (EVs) encountered challenges and opportunities. While excise charge on entry-level EVs has increased, indicating potential barriers to affordability, excise duty on high-end electric vehicles has decreased, drawing the idea of luxurious and eco-friendly rides.

Expansion of Charging Stations for EVs in Nepal

The Government of Nepal also announced plans to expand the network of charging stations across the country working with the private sector to encourage the use of electric cars (EVs). Indeed, the government is actively encouraging the use of EVs and paving the road for a cleaner and more sustainable transportation future.

Nepal’s budget 2080-81