Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: The price of gold in Nepal witnessed an unprecedented single-day jump of Rs 20,500 per tola on Sunday following the implementation of the government’s newly announced customs duty rates under the Fiscal Year 2083/84 budget.
According to the Federation of Nepal Gold and Silver Dealers’ Association, the price adjustment was made after the government doubled the customs duty on gold imports from 10 percent to 20 percent through the budget presented by Finance Minister Swarnim Wagle on Friday.
The federation’s First Vice President, Dharma Sundar Bajracharya, said the revised customs rate came into effect immediately after the budget announcement, forcing the market to adjust prices accordingly.
“Customs duties announced in the budget become effective from the following day. Based on the new rate, the federation adjusted the market price of gold,” Bajracharya said.
As a result, the price of fine gold climbed to Rs 311,100 per tola on Sunday, up from Rs 290,600 per tola recorded on Friday. The increase of Rs 20,500 per tola marks one of the steepest daily rises in Nepal’s gold market history.
Industry officials noted that while international gold prices registered only a modest increase of around 0.84 percent on Friday, the dramatic rise in Nepal was primarily driven by the government’s decision to double the customs tariff rather than movements in the global bullion market.
The budget also removed the existing 2 percent luxury tax on gold imports. However, traders argue that the relief provided through the removal of the luxury tax was overshadowed by the much larger impact of the increased customs duty.
Gold prices in Nepal are influenced by several factors, including international market rates, the exchange rate of the US dollar against the Nepali rupee, customs duties, taxes, and domestic demand.
The impact of the budget was not limited to gold. The government also increased customs duty on silver imports by 10 percentage points, raising the tariff from 10 percent to 20 percent.
Consequently, silver prices also rose sharply in the domestic market. The price of silver increased by Rs 305 per tola on Sunday, reaching Rs 5,345 per tola compared to Rs 5,040 per tola on Friday.
The latest price surge is expected to affect consumers, jewelry businesses, and the wedding season market, with industry stakeholders warning that higher import taxes could dampen demand and increase the cost of precious metals across Nepal’s retail market.
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