The government has revised the electric vehicle tax in Nepal for the Fiscal Year FY 2081/82. On Tuesday, Jestha 15, 2081, the then Finance Minister Mr. Barshaman Pun announced the government’s electric vehicle tax policies in his annual budget speech for the fiscal year 2081/82. The policies have increased taxes including excise duties on EVs which means EVs have become more expensive in Nepal.
But the government insists that the new EV tax policy is progressive and promotes its usage. The tax duties are based on kW capacity of EVs.
For 0 to 50 kW EVs, the government has decided to levy a 15% customs charge and 5% excise duty from FY 2081/82. Previously, vehicles coming under this range had 10% customs while there was no excise duty imposed.
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Electric Vehicle Tax in Nepal for 51 kW to 100 kW EVs
Likewise, for EVs that are 51 kW to 100 kW in capacity, the customs tax has been increased by 5% reaching 20% while excise duty has also been raised to 15%. The more powerful the kW capacity, the sharper the tax sting gets, however, the government has implemented a balancing act to some extent.
To illustrate, the EVs with kW capacity from 101 – 200 kW see a 10% increase in customs charge which means the EVs coming into the Nepali market will now have a 30% customs charge. However, the excise fee has been maintained the same at 20% for FY 2081/82.
The customs charge has been stiffer for EVs from 201 kW to 300 kW. These vehicles’ customs duty is raised by 40% to 60% but the government has lowered excise duty by 10% meaning it’s now 35%. It gets more punishing for EVs that are 301 kW and above. Starting FY 2081/82, EVs with 301 kW and above will bear an 80% customs charge and 50% excise duty.
| EV capacity | Customs charges FY 2081/82 | Excise duty FY 2081/82 | Difference |
| 0 – 50 kW | 10%↑ | ||
| 51 – 100 kW | 10%↑ | ||
| 101 – 200 kW | 20% (same) | 10%↑ | |
| 201 – 300 kW | 10%↑ | ||
| 301 kW | 10%↑ |
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The government continues to contradict EV promotion with the 2081 EV tax
The EV tax in 2081 contradicts the government’s claims of promoting an eco-friendly transport system. From FY 2080/81 to FY 2081/82, the government has raised total charges of 10%. This doesn’t look too bad but take into account the particular value. For EVs with 301 kW capacity, 80% of customs charges have been levied.
Therefore, anyone wishing that the government would be more generous and “logical” with the electric vehicles tax in Nepal was disappointed if not overwhelmingly frustrated. The government has long pitched for the shift towards EVs away from traditional fuel-powered vehicles.
There are some most-know reasons to buy an EV in Nepal. However, the tax policy which plays a prominent role in the business prospects has been unfriendly.
Not everyone is going to pay this exorbitant fee in customs and an additional 50% on excise duty. That is because normal middle-class to luxury buyers won’t be buying such large-capacity EVs. Their purchase would come in the middle of the table such as BYD Atto 3 and most of the other top electric cars available in Nepal. However, that range is also not exempt from hefty taxes. A 10% total tax is raised on each type of EV. That’s too much on the already high EV tax policy in Nepal.
No doubt the EV trend is rising but how the government perceives this industry is a question that should need answers. In 2023, 6,672 electric cars were imported. Likely, the number might increase further in the coming months and even years. But just because EVs are fine investments with low-maintenance costs, and provide better value, that doesn’t mean the government can impost “indiscriminate” taxes.
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Consumer-friendly EV policy is a must!
The Nepali government should and must bring a consumer-friendly EV policy to promote EV use. The state has a responsibility to reduce air pollution which is possible through rapid EV adoption. The government should be more lenient and revise its policies on EV imports which can actually encourage consumers towards EVs.
What do you think of the latest electric vehicle tax in Nepal for 2081? Is it counterproductive or the market will see a normal growth trajectory? Do offer your opinion in the comments below.