Finance Act 2083: what changed in Nepal's taxes for 2083/84
Nepal's Finance Act 2083 (आर्थिक ऐन, २०८३), Act No. 10 of 2083, was published in the Nepal Gazette on 2083/03/30 (14 July 2026) to carry out the 2083/84 budget. Some sections took effect on publication and the rest from Shrawan 1, 2083 (17 July 2026). It amends the VAT Act (s55), the Excise Act (s56), the Income Tax Act (s57) and the customs laws (s58-s59), levies new fees on luxury hotels, jewellery, private schools and hospitals, and offers amnesties that end with Poush 2083. Every change below was read in the Gazette itself.
The short version
- Income tax: one table for a person or couple, 1% to Rs 10 lakh, then 10%, 20%, 27% and 29%; the top rate falls from 39%.
- VAT: the Government may set several rates; 5% on ride-sharing and on electricity to final consumers; billing software that can delete or edit data costs Rs 5 lakh.
- Cash payments above Rs 25,000 at one time are not deductible for any business (was Rs 50,000 above Rs 20 lakh turnover).
- New levies from Shrawan 1: luxury fee 2%, skill promotion fee 0.5% on gold and silver, education and health equity fees 3%.
- Excise: a new schedule with domestic rates, a health risk tax on tobacco and nicotine, and credit for packing materials.
- Amnesty: unpaid VAT, income tax or excise paid with 1% by the end of Poush 2083 (14 January 2027) waives interest, fees and fines.
When each part took effect
Section 1(2) put sections 1-4, 6, 9-12, 15, 20 and 24-51, 54, most of s55, and s56, s58 and s59 into force at once on publication. The rest, including the new levies (s5, 7, 8, 13, 14, 16-19, 21-23), the 5% VAT (s55(1)(a)(1b)) and the Income Tax Act amendments (s57), took effect on Shrawan 1, 2083 (17 July 2026). The Act's own levies and special provisions (s5-s44, s50-s53) lapse at the end of Asar 2084 unless the next Finance Act renews them (s60); the amendments to the tax Acts are permanent.
Income tax changes (s57)
| Change | Before | From 2083/84 | Section of the Income Tax Act |
|---|---|---|---|
| Individual slabs | 1% to Rs 5 lakh, then 10/20/30/36/39%; separate couple table | 1% to Rs 10 lakh, 10% to 15 lakh, 20% to 25 lakh, 27% above, 29% above Rs 40 lakh; one table | Sch-1 s1(1) |
| Cash payment limit | Rs 50,000, for turnover above Rs 20 lakh | Rs 25,000, every person | s21(2) |
| Donation deduction cap | Rs 1 lakh | Rs 3 lakh (or 5%) | s12(2) |
| Corporate social responsibility | - | Deductible up to 1% of taxable income | s12D |
| Insurance agents | 15% | 20% final withholding | s88(1) proviso (14), s92(1)(ja2) |
| Ride-sharing drivers | - | 1% advance tax collected by the operator | s95A(6च) |
| Capital gains on listed shares (individuals) | 5% / 7.5% | 7.5% / 10% | s95A(2) |
| Capital gains on land and buildings (individuals) | 5% / 7.5% | 7.5% / 10%; 2.5% on compulsory acquisition; nil on gifts to government | s95A(5), (5क) |
| Building insurance deduction | Rs 5,000 | Rs 10,000 | Sch-1 s1(16क) |
| Children's tuition fees | - | Lower of 25% or Rs 25,000 deductible | Sch-1 s1(16ख) |
| Pension and disability deductions | 25% / 50% of Rs 5 lakh | 25% / 50% of Rs 10 lakh | Sch-1 s1(9A), (10) |
| Microfinance and cooperative interest | Exempt up to Rs 25,000 | Only the interest above Rs 25,000 is taxed | s11(2A) |
| Consumer-committee TDS | 1.5% above Rs 50 lakh | Deleted | s89(3क) |
| E-invoicing | IRD approval | IRD may order named taxpayers onto CBMS or its own billing system; software that edits data Rs 5 lakh | s81(5), s119A(1) |
| Amended assessments / refund claims | 4 years / 2 years | 3 years / 5 years | s101(3), s113(4) |
- New exempt income: land or buildings given free to a government, interest earned in Nepal by a foreign government's non-profit lender, drinking-water and sanitation user groups, and universities.
- Sweat shares given to IT-industry employees are left out of employment income.
- Cinema halls outside metropolitan and sub-metropolitan cities: ten years' tax holiday.
- Transfer pricing: related parties defined (30% control, loans above half of assets, 90% of supplies), a safe harbour for turnover up to Rs 1 arab, and advance pricing agreements of up to five years with four years' rollback (s33A, s33B).
- Only the person or couple's own table is left: the separate couple table (Sch-1 s1(2)) is deleted.
VAT changes (s55)
- Several VAT rates allowed by Gazette notice, none above 13% (s7(1a)); 5% on transport and freight through ride-sharing platforms, collected by the operator, and on electricity sold to final consumers (s7(1b), s8(2b)).
- Electricity exempt only for household use up to 50 units a month and for sales between electricity businesses (Schedule 1).
- Section 14A rewritten: IRD sets e-invoicing standards and may, by notice, order named taxpayers to issue electronic invoices joined to CBMS or to use IRD's own billing system, and must issue a procedure on billing software's security.
- Software that lets e-invoice data be deleted or corrected: Rs 5,00,000; other s14A breaches Rs 1,00,000 (s29(1)(g2)). Breaking IRD's directive on moving business goods: Rs 50,000 each time (s29(1)(m)). A Rs 1,000 fee in s29(1) rises to Rs 10,000.
- A return filed on time may be amended within 7 days (s18(4)); districts without an Inland Revenue Office file and pay by the 15th at the local level or treasury office (s18(1a)).
- The 10% VAT relief on electronic payments is now taken off the bill at once instead of refunded (s25(1b)).
- Schedule 1, the exempt list, replaced in full; an item is exempt only when its HS code and description both match.
New levies and fees
| Levy | Rate and base | Who collects | Deposit | If late |
|---|---|---|---|---|
| Luxury fee (विलासिता शुल्क) | 2% of the sale price of five-star hotel and luxury resort services; 2% on imported liquor at customs | The hotel or resort, on its invoice | Monthly, by the 25th of the next month, nil months too | 15% a year; late return 0.05% a day or Rs 1,000; 25% if not collected |
| Skill promotion fee (सिप प्रवर्द्धन शुल्क) | 0.5% of the sale price of gold and silver and their jewellery sold to final consumers | The jeweller | Monthly, by the 25th | Same as the luxury fee |
| Education equity fee (शिक्षा समता शुल्क) | 3% of every fee a private school, college or university charges students (not training institutes) | The institution, on an invoice | Every four months, within 25 days | 15% a year; Rs 1,000 a late return; 25% for evasion |
| Health equity fee (स्वास्थ्य समता शुल्क) | 3% of every service fee a private health provider charges patients | The provider, on an invoice | Every four months, within 25 days | Same as the education fee |
| Telecom service charge | 10% of telephone, mobile and internet tariffs (not interconnection) | The operator | By the 25th of the next month | 5% a month |
| Telephone ownership fee | Rs 500 a connection; 2% on SIM cards and recharges | The operator | By the 25th | 15% a year |
| Foreign employment service fee | 1% of what a manpower agency collects from each worker | The agency | By the 25th | 15% a year |
| Education service fee | 3% of foreign exchange sold for study abroad | The bank | By the 25th | 15% a year |
| Pollution control fee | Rs 1.50 a litre of petrol and diesel | The importer | By the 25th | 15% a year |
| Film development fee (FY 2083/84) | 15% of foreign films' entry fees (20% on cabin tickets) | The cinema, on e-tickets | By the 25th | 25% a month |
| Digital service tax | 2% of a non-resident's digital sales to Nepali consumers above Rs 30 lakh a year (not business buyers) | The foreign provider | Annual, within three months of the year | 15% a year; 50% for concealment |
Customs-point levies are added at import: green tax (for example petrol Rs 15 and diesel Rs 13 a litre), the domestic production protection fee, the clean infrastructure fee on electric vehicles (2.5% to 20%) and the road construction fee on vehicles (9-10%, or Rs 10,000-20,000 a motorcycle or three-wheeler), which a Nepali vehicle maker's buyer pays at registration on the VAT-inclusive invoice value.
Excise changes (s56)
- A new schedule from Shrawan 1, 2083: 854 lines with domestic rates set apart from import rates; see the excise guide.
- Health risk tax on tobacco and nicotine products (s20, Schedule 10), reported in the excise return.
- Tobacco products now include nicotine products such as vapes, nicotine pouches and hookah flavour; liquor includes cocktails, carbonated wine, spritz and shandy.
- Subsidiary raw materials and packing materials become creditable; VAT-registered sellers may give discounts on liquor and tobacco.
- Digital excise tickets, a track-and-trace system, and a 0.5% tolerance on declared alcohol strength.
- Instalment arrears carry 5% a year interest; duty-free liquor resold is confiscated with a fine of the claimed amount or Rs 1 lakh.
Amnesties and their deadlines
| Who | What to do | By | Section |
|---|---|---|---|
| VAT not collected, or collected and not deposited | Deposit the VAT with 1% and file returns up to Chaitra 2082 | 30 Poush 2083 (14 January 2027) | s41 |
| Returns filed but VAT, income tax or excise unpaid at 2083/02/15 | Pay the balance with 1% | 30 Poush 2083 | s44 |
| Assessed arrears up to 2083/02/15 (not telecom) | Pay the unpaid amount with 1% | 30 Poush 2083 | s45 |
| Disputed assessments (not telecom) | Withdraw the review or case and pay the tax with 1% | 30 Poush 2083 | s46 |
| Earners without a PAN | Take a PAN, file 2079/80 to 2082/83 and pay; earlier years forgiven | 30 Poush 2083 | s40 |
| Dormant PANs | File 2082/83 and apply to cancel or resume, or the PAN is cancelled | 30 Poush 2083 | s40 |
| Excise returns | File and pay the excise with 1% | 30 Poush 2083 | s43 |
| Excise licences not renewed | Pay 2082/83's renewal only, or the licence is cancelled | 31 Ashwin 2083 (17 October 2026) | s43 |
| Finance Act fees and levies unpaid | Pay the balance with 1% and file | 29 Mangsir 2083 (15 December 2026) | s49 |
| Staff of international bodies not exempt | PAN, 2079/80-2082/83 tax with 1% | 29 Mangsir 2083 | s47 |
| Expired raw materials and goods | Destroy and write off before the officers; no excise refund | 30 Poush 2083 | s32 |
Businesses hit in the Gen Z movement may deduct uninsured stock lost in 2082/83 without reversing its input VAT, if the tax office was told in time (s26), and import restoration goods at half the customs duty and excise (s27). Contributions to the National Reconstruction Fund in 2082/83 are deductible (s25).
Rates can change during the year
Section 18 lets the Government raise, cut or exempt any fee, duty or tax by Gazette notice during the year, and the Ministry of Finance give concessions to non-profit and public bodies; misusing an exemption costs the tax plus a fine of the same amount. Section 19 lets the Ministry extend deadlines by notice after a disaster or disruption. Check the IRD's notices before relying on a rate late in the year.
Questions
When did the Finance Act 2083 come into force?
Some sections on its publication in the Nepal Gazette on 2083/03/30 (14 July 2026); the rest, including the new levies and the income tax changes, from Shrawan 1, 2083 (17 July 2026).
What are the new income tax slabs under the Finance Act 2083?
1% to Rs 10 lakh, 10% to Rs 15 lakh, 20% to Rs 25 lakh, 27% to Rs 40 lakh and 29% above, for a resident individual or couple.
Did the VAT rate change in the Finance Act 2083?
The standard rate stays 13%. The Act allows lower rates by notice and sets 5% on ride-sharing transport and freight and on electricity sold to final consumers.
What is the luxury fee in Nepal?
2% of the sale price of services of five-star and higher hotels and luxury resorts (and 2% on imported liquor at customs), collected on the invoice and deposited monthly by the 25th.
What is the skill promotion fee?
0.5% of the sale price of gold, silver and their jewellery sold to final consumers, collected by the jeweller and deposited monthly.
What are the education and health equity fees?
3% of every fee a private school, college or university charges students, and 3% of every service fee a private health provider charges patients, invoiced and deposited every four months.
What is the tax amnesty deadline in 2083/84?
The end of Poush 2083 (14 January 2027) for most: unpaid VAT, income tax or excise paid with 1% waives the interest, fees and fines. Finance Act fees and levies: the end of Mangsir 2083 (15 December 2026).
What is the fine for billing software that can edit invoices?
Rs 5 lakh for an e-invoicing taxpayer using it, under both the VAT Act and the Income Tax Act as amended by the Finance Act 2083; other breaches cost Rs 1 lakh.
Sources
- आर्थिक ऐन, २०८३ (Finance Act 2083), Nepal Gazette 2083/03/30
- IRD: Finance Act 2083 handbook on exemptions, concessions and other provisions (revised edition)
- मूल्य अभिवृद्धि कर ऐन, २०५२ (VAT Act 2052), as amended to the Finance Act 2082
- आयकर ऐन, २०५८ (Income Tax Act 2058), as amended to the Finance Act 2082
- अन्तःशुल्क ऐन, २०५८ (Excise Act 2058)
- BRAccount's page-by-page reading of all 415 pages of the Finance Act 2083 GazetteSections 1-61 and Schedules 1-11, with the excise schedule's 854 lines.