Each year, the Government of Nepal's budget announcement brings changes to the country's tax structure, and the automotive sector is always a key area of focus. For the fiscal year 2081/82, new revisions to vehicle taxes have been implemented, affecting the final on-road price of cars and motorcycles. Understanding these changes is crucial for anyone looking to purchase a new vehicle.
Breaking Down Vehicle Taxes in Nepal
The total cost of a vehicle in Nepal is determined by three main taxes levied on its import value:
- Customs Duty: A tax on importing the vehicle into the country.
- Excise Duty: An additional tax, often varying based on the engine capacity (cc) or motor power (kW for EVs). This is where most annual changes occur.
- Value Added Tax (VAT): A 13% tax applied on the total value after the above duties are added.
Key Changes for 2081/82
The latest budget continues the government's policy of promoting electric mobility while managing the import of luxury fossil fuel vehicles. The key highlights of the tax revision include:
- EVs Remain Advantaged: Electric vehicles, particularly those with a motor power below 100 kW, continue to enjoy significantly lower tax rates compared to their petrol or diesel counterparts. This maintains their price advantage and encourages green transport.
- Adjustments for High-Capacity Engines: There have been slight upward revisions in the excise duty for petrol and diesel vehicles with larger engine capacities (typically above 2000cc), making luxury SUVs and sedans slightly more expensive.
- Hybrid Vehicle Category: The tax structure for hybrid vehicles has been further clarified to encourage their adoption as a middle ground between traditional and fully electric cars.
For the average buyer, the message is clear: small-capacity petrol cars and mainstream EVs remain the most tax-efficient choices. Before finalizing a purchase, we strongly advise buyers to consult with their dealership to get a precise on-road price calculation based on the very latest tax slabs.
