Kathmandu: The Government of Nepal has officially abolished the luxury tax previously levied on gold and gold jewellery.
Finance Minister Dr Swarnim Waglé announced this decision on Friday while presenting the Financial Bill for the upcoming fiscal year 2083/84 in Parliament. This move effectively removes the 2 percent luxury surcharge that had been introduced in the previous fiscal year’s budget, signalling a strategic shift to ease the tax burden on the bullion and jewellery sector.
The introduction of the luxury tax in the 2082 Economic Bill had initially sparked widespread protests and strikes from jewellers and entrepreneurs across the country, who argued that the levy was impractical and detrimental to the industry. Following intense discussions with the business community, the government reached an agreement in late August 2025 (Bhadra 2082) to halt the collection of this controversial fee. While the tax remained technically active in the law for several months, the cabinet’s earlier decision had already paved the way for its formal removal in the current legislative cycle.
To resolve the administrative complications caused by the non-collection of the tax during the protest period, the new Financial Bill includes a specific amnesty provision. It states that if a seller did not collect the luxury tax on gold jewellery or the Value Added Tax on diamonds, gems, and precious stones before August 18, 2025 (Bhadra 2, 2082), the outstanding dues will be automatically waived.
Furthermore, affected businesses are not required to submit any specific documentation or transaction details regarding these uncollected taxes, providing a clean slate for the jewellery industry and ending a significant point of friction between the state and traders.
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