Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The government has made it mandatory for ride-sharing drivers to obtain a Permanent Account Number (PAN) as part of efforts to bring Nepal’s rapidly growing ride-sharing sector under the formal tax system.
The Inland Revenue Department (IRD) issued a public notice stating that individuals providing services through ride-sharing platforms must obtain a PAN before conducting business. The directive cites Section 78 of the Income Tax Act, 2002 (2058 BS) and Rule 23 of the Income Tax Rules, 2002 (2059 BS) as the legal basis for the requirement.
According to the notice, any individual affiliated with a ride-sharing platform as a service provider must secure a PAN before offering transportation services.
“Persons providing services through the platform of a ride-sharing operator must obtain a Permanent Account Number (PAN) before carrying out business,” the department said.
The IRD also clarified that ride-sharing platform operators will now be required to register for Value Added Tax (VAT) under provisions introduced through the budget and the Economic Act 2083 for the upcoming fiscal year.
The government had announced that transportation and delivery services provided through ride-sharing platforms would be brought within the VAT system.
Under the new arrangement, operators of ride-sharing platforms must be registered for VAT and are responsible for collecting VAT on behalf of drivers.
The department said platform operators must collect 5 percent VAT on the service fees charged by drivers providing transportation and delivery services through their platforms.
In addition, operators will be required to issue tax invoices on behalf of drivers for transactions conducted through the platform.
The VAT collected must be deposited with the concerned tax office by the 25th day of the following month, in line with Nepal’s tax filing requirements.
While ride-sharing operators are required to register for VAT, the department clarified that individual drivers will not be required to obtain separate VAT registration after acquiring a PAN.
The latest measures are aimed at formalizing Nepal’s expanding digital ride-sharing industry by strengthening tax compliance and improving revenue collection. The move follows the government’s decision in the new fiscal year’s budget to regulate taxation of digital transportation platforms while assigning VAT collection responsibilities to platform operators rather than individual drivers.
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
