Fiscal Nepal
First Business News Portal in English from Nepal
TAX reduce budget
KATHMANDU — The government has announced plans to reduce taxes from the upcoming fiscal year, signaling relief for the middle class and business community as Nepal seeks to stimulate economic activity, investment, and entrepreneurship.
Presenting the government’s Policies and Programmes before the joint session of the Federal Parliament on Monday, President Ram Chandra Paudel said the government would introduce measures to lower the tax burden, particularly targeting entrepreneurs, businesses, and middle-income households.
The announcement is expected to shape the government’s annual budget for fiscal year 2083/84 (2026/27), which is scheduled to be unveiled on Jestha 15 (May 29, 2026).
The government’s commitment to reducing taxes suggests possible revisions to income tax slabs and other tax rates, which many businesses and taxpayers have argued are overly burdensome and fragmented.
Currently, Nepal’s personal income tax rates range from 1 percent to 39 percent, while businesses and consumers face multiple layers of taxation across different sectors. Economists and private sector representatives have repeatedly called for tax rationalization to improve competitiveness, encourage formalization, and revive sluggish economic activity.
In addition to tax reforms, the government pledged to make Nepal’s capital market more secure, transparent, and competitive, amid growing participation in the country’s stock market.
The policy framework also outlines plans to strengthen anti-money laundering and asset laundering regulatory systems, reflecting Nepal’s efforts to improve financial governance and regulatory compliance.
Furthermore, the government announced plans to mobilize long-term capital through debt instruments, including the expansion of the loan market, bond market, and infrastructure bonds, aimed at financing major development projects and deepening Nepal’s financial system.
The private sector is expected to closely monitor the upcoming budget for concrete measures on tax reduction, investment incentives, business facilitation, and financial sector reforms, which could significantly influence economic growth, consumption, and investor sentiment in Nepal.
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