Taxes Revised on Electric Vehicles, Inconsistent Policy?

• Taxes revised on electric vehicles by the government.
• The new policy to affect vehicles’ costs on account of their kW specs
• Taxes seem to be contradictory to the government’s own policy of encouraging EVs.

The government has revised taxes on electric vehicles. The finance minister Dr. Prakash Sharan Mahat announced the new tax policies in his annual budget speech for the fiscal year 2080/81. As per the announcement, the taxes on EVs has increased and so have the excise duties.

Through the Economic Act, a 10 percent duty has been levied on vehicles with a capacity of up to 50 kW. But there’s no excise duty on such vehicles.

Similarly, the excise duty on electric vehicles from 50 to 100 kilowatts has been increased from 5 percent to 15 percent. Now, these vehicles will attract a 10 percent excise duty which had not been present till now.

Do read: Best electric cars Price in Nepal

Customs charges reduced for cars

In the meantime, the customs rate has been reduced from 30% to 20% for cars with electric motors from 100 kW to 200 kW. Similarly, the excise duty on electric cars with the same motor capacity has been reduced to 20 percent from 30 percent.

The duty on electric vehicles with a motor capacity between 200 and 300 kW has been reduced from 45 to 40 percent. Excise duty has been kept unchanged at 45 percent. Both customs and excise duties on electric vehicles above 300 kW have been kept unchanged at 60 percent.

Electric vehicle tax policy Nepal

Check out the new tax policy on electric vehicles in Nepal as announced in the budget speech FY 2080/81.

A progressive policy!

The government has tried to promote the use of eco-friendly EVs with its tax policy. The tax has been reduced on electric cars but excise duty has been levied which was non-existent currently. So, the policy at best can be described as contradictory.

EVs are a growing trend in Nepal. Forced by the ever-increasing fuel prices and a desire for green transport, many have entertained the idea to ride an electric vehicle. It is a new allure in the auto industry in Nepal. Check out: Why You Should Buy an Electric Vehicle in Nepal?

How do you think the revised tax on electric vehicles impacts its market? Will it be counterproductive or spurn its usage further? Do offer your opinion in the comments below.