PAN and tax clearance certificates go fully digital as Nepal accelerates transition to a fully digital tax system

KATHMANDU: In a major push toward modernizing Nepal’s revenue administration, the Inland Revenue Department (IRD) has made individual Permanent Account Numbers (PAN) and tax clearance certificates fully digital, marking a significant leap in the country’s journey toward a complete digital tax system. The announcement was made by IRD Director General Madan Dahal during a special program organized on Monday to celebrate National Tax Day.

Dahal stated that the government has formally advanced preparations to transition Nepal’s entire tax system into a fully digital platform, with the objective of improving transparency, taxpayer convenience, and administrative efficiency. “We have moved forward with preparations to make the tax system fully digital,” Dahal said. “From today, individual PAN and tax clearance certificates are completely digital. This is an important milestone in our drive to modernize tax administration.”

Taxpayers Can Now Obtain Certificates From Home

Under the new arrangement, individuals earning less than Rs 4 million annually and receiving income from a single office will now be able to obtain their tax clearance certificates directly from home. This change is expected to significantly ease the compliance burden for small taxpayers, professionals, and salaried individuals who often face delays due to long queues and manual paperwork at tax offices.

Dahal emphasized that these reforms are designed to streamline taxpayer services and reduce administrative friction. “Now, taxpayers with annual income below Rs 40 lakh and those who receive payments from only one office will get tax clearance from home. There is no need to visit any tax office,” he explained.

Major Step in Digital Governance

The move is part of a broader digital transformation strategy of the government, which has long expressed commitment to developing an electronic and technology-driven governance framework. By making core tax services fully digital, the government aims to strengthen record-keeping, reduce human error, minimize opportunities for corruption, and ensure real-time access to taxpayer information.

Officials believe that full digitalization will play a critical role in widening the tax base, improving revenue forecasting, and enhancing compliance without raising tax rates. With Nepal’s economy facing pressure from slow growth and falling investment confidence, experts say digital systems can ensure predictable tax administration—crucial for businesses and investors.

Expected Benefits for Businesses and Citizens

Tax experts note that the IRD’s digital push will particularly benefit small and medium enterprises (SMEs), startups, and professionals who are often burdened by outdated paper-based procedures. Digital tax clearance processes will save time, reduce costs, and ensure faster processing of financial documentation required for banking, loans, business registration, contract bidding, and foreign employment applications.

The new system is also expected to improve data reliability for the government, allowing policymakers to analyze tax trends more accurately and introduce evidence-based reforms. Improved transparency in tax administration may also encourage more taxpayers to voluntarily comply with regulations.

Part of Long-Term Digital Tax Roadmap

Dahal reaffirmed that the IRD is committed to taking this reform further. The department is working on digitizing additional components of the tax administration system, including automated assessments, online dispute resolution mechanisms, digital audit triggers, and integrated taxpayer databases.

“With today’s reforms, we have taken a strong step toward building a modern, transparent, and taxpayer-friendly digital tax regime,” Dahal said. “Our goal is to eliminate unnecessary hassles and make the tax system easier, faster, and more accountable.”

As Nepal moves steadily toward full digitalization, the IRD’s initiative is being seen as an important milestone that could reshape the country’s tax governance and improve the overall business environment.