HoR passes Economic Bill 2083, Clearing way for new tax and fiscal measures

Finance Minister Swarnim Wagle says ambitious budget will accelerate economic recovery, pledges stronger capital spending and review of VAT structure

KATHMANDU: Nepal’s House of Representatives on Sunday passed the Economic Bill 2083, paving the way for the implementation of the government’s tax and fiscal policy measures for the upcoming fiscal year.

The bill was endorsed by a majority vote after Deputy Prime Minister and Finance Minister Dr. Swarnim Wagle tabled a proposal seeking its approval during the House meeting.

Before the bill was passed, Finance Minister Wagle responded to lawmakers’ questions raised during discussions on proposed amendments. He said the government would place special emphasis on effective budget implementation and expressed confidence that the long-standing problem of low capital expenditure would gradually be addressed beginning in the next fiscal year.

“The government is committed to improving budget execution, particularly development spending,” Wagle told Parliament, adding that reforms in public expenditure management would help enhance the pace of infrastructure development and overall economic growth.

Government defends tax policy

Addressing concerns over the new tax measures included in the bill, the finance minister said the government’s taxation policy had been designed in a way that would not place an additional burden on low-income citizens.

He argued that the budget introduced for the upcoming fiscal year contains ambitious yet practical measures aimed at strengthening Nepal’s economy and stimulating investment, with positive results expected to become visible from the next fiscal year.

High-level panel to study multi-rate VAT

Responding to lawmakers’ concerns regarding Nepal’s Value Added Tax (VAT) system, Wagle announced that the government would form a high-level study committee to examine the feasibility of introducing a multi-rate VAT structure.

He said the Ministry of Finance would take necessary policy decisions based on the committee’s recommendations after completing the study.

The proposal reflects growing discussions within Nepal’s business community and among policymakers on whether the existing single-rate VAT system should be restructured to better support economic activity and improve tax efficiency.

Government confident on fiscal management

The finance minister also assured Parliament that the government’s expenditure programme would primarily be financed through domestic resources.

However, he acknowledged that if revenue mobilisation faces unexpected challenges, the government may need to adopt contingency measures to ensure fiscal stability and uninterrupted budget implementation.

Ride-sharing platforms to come under tax net

Wagle also indicated that the government is preparing policy measures to bring ride-sharing businesses within Nepal’s formal tax system.

He noted that the ride-sharing industry has grown into a multi-billion-rupee business and said it is appropriate for operators in the sector to contribute to government revenue through taxation.

The move is expected to strengthen tax compliance in Nepal’s rapidly expanding digital platform economy while creating a more level playing field among transport service providers.

Amendments disposed of

During the legislative process, several proposed amendments to the Economic Bill were withdrawn by lawmakers, while others were rejected by the House through voting.

Parliament, however, accepted a number of amendments before endorsing the final version of the bill.

The passage of the Economic Bill represents one of the key legislative steps required for implementing the government’s fiscal policy framework for the upcoming fiscal year, alongside the Appropriation Bill and other budget-related legislation. Once the remaining legislative procedures are completed, the government will be able to enforce the new tax measures and fiscal provisions outlined in the national budget.