Kathmandu: The government led by Prime Minister Balendra Shah has introduced a landmark series of tax exemptions and incentives designed to revitalize the national economy and stimulate productive sectors.
During the presentation of the federal budget for the fiscal year 2026/27, Finance Minister Dr Swarnim Waglé emphasized a vision centered on agriculture, industrial growth, and infrastructure development, offering significant relief to both individual citizens and entrepreneurs. These strategic fiscal measures are intended to lower the cost of living while fostering an environment where domestic businesses can thrive through reduced administrative and tax burdens.
In a move prioritizing humanitarian services and domestic manufacturing, the Balen administration has announced a full customs duty waiver on raw materials imported for the production of prosthetic limbs and disability aids within Nepal.
This initiative aims to ensure that persons with disabilities have access to high-quality assistive devices at more affordable prices while encouraging self-reliance in the health manufacturing sector. Additionally, the government has introduced a new incentive for homeowners, allowing citizens to deduct up to 10,000 rupees of their annual residential insurance premiums from their taxable income. This policy is expected to significantly widen the insurance net and safeguard private property against unforeseen disasters.
To accelerate national development and resolve long-standing hurdles in land acquisition, the government has decided to waive capital gains tax on land provided for national infrastructure projects, provided the transaction remains within government-fixed valuations. This reform is set to streamline the compensation process and ensure the timely completion of vital public works.
Furthermore, to spark an agricultural revolution, a comprehensive 10-year income tax holiday has been granted to agro-processing industries. This is complemented by a full Value Added Tax (VAT) exemption on essential machinery and equipment for cold storage, packaging, and quality testing laboratories, aimed at modernizing the agricultural supply chain and boosting domestic output.
Beyond direct financial incentives, the government is committed to a fundamental overhaul of tax administration, shifting from a punitive approach to one that treats taxpayers as partners in development. Finance Minister Waglé stated that honest taxpayers and institutions will be accorded special recognition and benefits through simplified procedures and the implementation of a technology-driven, transparent system. By eliminating cumbersome bureaucratic hurdles and promoting digital accountability, the government hopes to build a more trustworthy and efficient fiscal environment that encourages voluntary compliance and long-term economic stability.
Comment Here