No double VAT on electricity trade, customs duty on EVs based on price: Finance Minister Wagle

Kathmandu. Finance Minister Dr. Swarnim Wagle has said that a provision has been made to avoid the value added tax (VAT) while selling electricity to another entrepreneur. He made it clear that the VAT system will be implemented in such a way that only the end consumers will be affected.

Speaking at the meeting of Finance Committee under the House of Representatives on Wednesday, Minister Wagle said that the tax system has been made simple, scientific and investment-friendly.

According to him, taxpayers earning up to Rs 1 million annually will have to pay only 1 percent income tax. Also, the upper rate of income tax (marginal tax rate) has been reduced from 39 percent to 29 percent.

Minister Wagle said that the budget has also introduced a new provision to deduct 25 per cent of the expenditure on the education of children or Rs 25,000, whichever is less, from the taxable income. He urged the citizens to join the formal tax system and file income tax regularly.

He said that the customs duty on electric vehicles (EVs) will now be determined on the basis of price instead of ‘peak power’. Stating that customs duty was misused in the past while determining the peak power and the Auditor General pointed out arrears worth billions of rupees, he said the new system has been implemented based on scientific practice and research. He also said that the policy has been corrected so that the price of EVs will not increase more than Rs 50 lakh.

Likewise, the cinema hall operating in areas other than metropolitan cities and sub-metropolitan cities will be exempted from tax for 10 years from the date of operation, said Minister Wagle.

He also informed that the VAT on carriers used for transporting blood and vaccines to the health sector has been reduced from 30 percent to 15 percent.