Kathmandu: In a significant policy shift, the Government of Nepal has decided to bring electricity consumption under the Value Added Tax (VAT) net.
According to the newly announced fiscal measures, a concessional rate of VAT will be applied to electricity usage exceeding 50 units per month for end-consumers.
This move marks a departure from previous tax exemptions on power bills, aiming to broaden the tax base while ensuring that low-income households consuming minimal energy remain unaffected by the new levy.
Finance Minister Dr Swarnim Waglé unveiled these tax reforms while presenting the national budget for the upcoming fiscal year 2083/84 before a joint session of the Federal Parliament.
During the same address, the Minister also officially announced a salary increase for government employees. These dual announcements represent the administration’s broader strategy of balancing revenue generation through targeted taxation with enhanced social support for the civil service.
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