KATHMANDU: Nepal’s automobile sector remained stable in FY 2082, with improved vehicle sales compared to the previous year. Policy developments introduced a mix of tightening measures, reforms and continuity.
Here are the 20 key policy measures:
- EV financing tightened: Nepal Rastra Bank reduced the loan-to-value (LTV) ratio for EVs from 80% to 60%, while increasing ICE vehicle LTV to 60%.
- Budget surprise on EV tax: EV tax rates remained unchanged despite expectations of a hike. Electric pickups were classified into single and double cabin, with higher tax on double-cab variants.
- Industry incentives introduced: EV charging equipment, battery storage and green hydrogen industries received tax exemptions, 1% customs duty on machinery imports, and a 5-year income tax holiday.
- Vehicle tax relief in Bagmati: Taxpayers can clear dues by paying only the last three years of tax by May 14. Penalties waived under specific conditions.
- Euro standards enforced: Euro 5 for two-wheelers and Euro 6 for four-wheelers implemented. Financing restricted for non-Euro 6 vehicles.
- Court order on EV policy: Supreme Court directed authorities to revise EV loan policies and ensure long-term stability, including promotion of clean mobility.
- 7. Insurance for government vehicles: Comprehensive insurance made mandatory after protest-related damages.
- 80% loan for affected businesses: Financing support introduced for those impacted by protest-related losses.
- QR-based licenses printing: Contract awarded to print 1.2 million licenses with QR codes. Around 2.9 million licenses remain pending.
- Ethanol blending approved: Up to 10% ethanol can be mixed in petrol based on availability and feasibility.
- Embossed plate rule revised: Supreme Court restricted mandatory use of English language on embossed number plates.
- Cash payment limit reduced: Transactions above Rs 500,000 banned in cash, including vehicle purchases.
- RFID toll payment system: Banks allowed to issue prepaid RFID cards for toll collection.
- Income ratio monitoring: Borrowers must update debt-service-to-income ratio throughout the loan period.
- Dealers under monitoring: Vehicle dealers and hire-purchase firms listed under “red flag” category for suspicious transactions.
- New taxi standards implemented: Updated national standards define classification, safety features and vehicle specifications.
- ICE to EV conversion allowed: Government opened pathway for conversion, but detailed procedures are pending.
- Fuel tax relief: 50% reduction in customs and infrastructure tax on petrol, diesel and kerosene.
- License validity extended: Driving license validity increased to 10 years with plans for faster processing and home delivery.
- Public transport fare hike: Passenger and freight fares increased based on fuel price adjustments across regions.
