KATHMANDU: The government has announced major policy changes for Nepal’s automobile sector through the budget for Fiscal Year 2026/27 (2083/84). The new budget focuses on electric mobility, tax reform and transport infrastructure development.
EV tax now based on vehicle value
The government has changed the customs duty system for electric vehicles. EV tax will now be calculated based on the vehicle’s value instead of peak motor power (kW).
Finance Minister Dr. Swarnim Wagle said the previous system created market distortion, as some expensive vehicles with lower kW ratings were paying less tax. The new value-based structure is expected to affect the pricing of premium EV models in the market.
Clean infrastructure investment fee introduced
The budget has also introduced a new ‘Clean Infrastructure Investment Fee’ at the customs point.
According to the government, the collected amount will be used to support domestic EV assembly, expansion of charging stations and battery recycling management. A separate fund will be created for the development of Nepal’s EV ecosystem.
Multiple charges merged into green tax
The government has removed several existing charges collected at customs, including infrastructure development tax and road maintenance fee.
These charges have now been merged into a single ‘Green Tax’. The government says the move will simplify the vehicle taxation system.
Smart urban mobility program in Kathmandu
The budget has announced a ‘Smart Urban Mobility’ program for Kathmandu.
Under the program, the government plans to introduce electric public buses, charging infrastructure, vehicle tracking systems and smart bus parks. Pokhara will also gradually shift towards electric public transport services.
The government has also encouraged petrol pumps to install EV charging stations with minimum required infrastructure.
Blue bus service and safety measures
A new CCTV-equipped ‘Blue Bus’ service will be introduced in Kathmandu with a focus on improving women’s safety in public transport.
The government has also increased third-party vehicle insurance coverage to Rs. 1 million.
In addition, accident detection devices will be made mandatory in vehicles to improve road safety standards across the country.
