KATHMANDU: Finance Minister Dr. Swarnim Wagle has said the prices of electric vehicles priced below Rs 5 million will decrease after the government corrects a tax provision introduced through the budget for FY 2026/27.
Speaking at a post-budget discussion organized by NAFIJ on Monday, Wagle said the Road Development Fee (RDF) on EVs below Rs 5 million will be reduced from 5 percent to 2.5 percent. He said the higher rate was included in the Economic Act due to an error and will be corrected.
However, EVs priced above Rs 5 million will continue to attract a 5 percent RDF.
According to Wagle, the government wants to continue supporting middle-class EV buyers while imposing higher taxes on luxury vehicles. He said EVs costing more than Rs 10 million should be treated as luxury products and should not receive the same level of tax incentives.
The finance minister said Nepal previously offered generous tax benefits to encourage EV adoption. As EV penetration has increased, the government is now moving towards a more balanced tax policy.
Wagle also said the new CIF value-based taxation system will simplify EV imports and reduce administrative complications. He added that the Prime Minister had instructed policymakers not to increase taxes on EVs priced below Rs 5 million.
The minister stressed that the government must balance the promotion of clean transportation with the need to manage foreign exchange reserves, while continuing to expand electric mobility and public transport projects across the country.
