Govt suspends 3% education and health equity taxes: PM Balendra

KATHMANDU: The government has decided to suspend the implementation of the 3% education equity fee and 3% health equity fee imposed on private education and health services, Prime Minister Balendra Shah has announced.

Prime Minister Shah said the decision was taken following consultations with Finance Minister Swarnim Wagle, after the government concluded that implementing the taxes in their existing form could increase costs for the general public and cause further dissatisfaction.

“In the current circumstances, implementing the 3% equity tax imposed on private education and health services would mean additional financial burdens and frustration for ordinary citizens. Therefore, following consultation with Finance Minister Swarnim Wagle, we have decided not to implement the education equity fee and health equity fee for the time being,” Shah said.

The decision comes amid concerns over the potential impact of the additional charges on consumers of private healthcare and education services.

According to the prime minister, the 3% equity taxes were introduced with the objective of mobilising resources to provide better education and healthcare services to people living in remote and disadvantaged areas, support children from Dalit, marginalised and low-income communities, and expand health insurance coverage.

The government had also sought to broaden the tax base and make the economy more structured through the new taxation measures.

However, Shah said the government’s attention had been drawn to the public response and concerns surrounding the equity taxes.

He said the government would continue to listen to citizens and remain committed to building a more equitable society.

“This is a people-oriented government formed on the basis of the trust and expectations of the people. Our primary objective is to ensure good governance and enable all citizens to experience a quality life,” Shah said.

He added that all government decisions would be guided by the interests of citizens and that the government would remain ready to revise or amend any decision if it failed to meet public expectations.

Government to Reserve 10% of Private Hospital Beds, College Seats

Despite suspending the 3% equity fees, the government has said it remains committed to ensuring access to quality education and healthcare for poor and disadvantaged citizens through other policy measures.

According to Prime Minister Shah, the government will implement a policy requiring private hospitals to make 10% of their beds available and private colleges and universities to reserve 10% of their seats for disadvantaged and poor citizens.

The government aims to ensure that such facilities are provided through a transparent and fair system, he said.

The policy is intended to expand access to quality education and healthcare for people who cannot afford expensive private-sector services.

Shah reiterated that the government’s broader objective is to build an equitable society in which disadvantaged and low-income citizens can access quality healthcare and education.

The government’s decision to suspend the education and health equity fees marks a significant policy shift, while its commitment to reserve seats and hospital beds for disadvantaged groups signals a move towards achieving equity through direct access-based measures rather than the proposed additional taxation.