Commencement of new FY marks implementation of fresh tax measures, including income tax

KATHMANDU: As the new financial year, 2023-24, begins, the government’s announced tax-related arrangements have come into effect.

Starting from July 17, as per the revised provisions outlined in the Income Tax Act 2002, individuals earning over 5 million rupees annually will now be subject to a 39 percent income tax rate. Previously, those earning above 2 million rupees annually were levied a 36 percent income tax.

Additionally, the government has introduced a luxury tax, which will be implemented for the first time starting today. Services provided by five-star hotels, restaurants, and resorts will incur a two percent luxury tax. Furthermore, a luxury duty of two percent has been imposed on precious metals valued at more than one million rupees.

In the budget, the government has stipulated that imported alcohol and specific items such as diamonds, pearls, and gold jewelry embedded with stones or precious metals worth over one million rupees will be subject to the same tax rate.

This tax will be collected solely when the aforementioned establishments provide services. Customs duties on imported liquor will be collected at the point of entry, while vendors selling metal jewelry exceeding the one million rupee threshold will be responsible for collection.

Moreover, a five percent tourism fee on foreign tour packages sold by travel agencies has been implemented, effective immediately.

Following the release of the budget on May 29th, provisions relating to customs duties, excise duties, value-added tax, road construction duties, and mobile phone registration have also been put into effect.

Fiscal Nepal |
Monday July 17, 2023, 12:42:51 PM |

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