KATHMANDU: The Bagmati Provincial Government has introduced various provisions related to vehicle tax rates and discounts for the upcoming fiscal year 2026/27.
The province has included the provisions through the Economic Bill 2083 to implement the budget for the next fiscal year. The new rules include tax adjustments, exemptions, and facilities for vehicle owners with pending taxes.
The provincial government has kept the vehicle tax rates unchanged for most vehicles. However, the annual tax for private and public electric vehicles up to 50 kW has been increased by Rs 1,500 and Rs 1,000, respectively.
The province has also doubled the fees for driving license applications, renewals, and category additions.
Bagmati has introduced discount schemes targeting vehicle owners who have not paid vehicle taxes for a long time, failed to renew their vehicles, or have not removed old vehicle records as per the rules. Vehicle owners must clear their dues within the specified period to receive the benefits.
The major vehicle tax and discount provisions introduced by Bagmati Province are as follows:
- Vehicles registered under the Government of Nepal, provincial government, or local level will be charged tax equivalent to rental vehicles. However, two-wheelers owned by government bodies will be charged tax similar to private two-wheelers.
- Electric vehicles registered under the Government of Nepal, provincial government, or local level will be taxed similar to rental electric vehicles. However, electric two-wheelers will be taxed like private electric two-wheelers.
- Public institutions fully or partially owned by government bodies and tourism vehicles will be charged tax according to their vehicle category, similar to private vehicles.
- Vehicles imported less than one year ago will receive a proportional tax reduction. This provision will not apply to vehicles kept in business stock.
- Vehicles damaged in accidents and certified as unable to operate will not be charged vehicle tax for the period they remain unused. The vehicle owner must submit recommendations from the local level and nearby police office.
- For vehicles older than 15 years (counted from the date of manufacture), an additional vehicle tax will be charged. This additional tax is 5 percent of the regular vehicle tax for each year beyond the 14th year. However, this additional amount cannot exceed the regular tax amount already set for that vehicle.
- Bus, minibus, and microbus owners providing fare discounts to students, senior citizens, and persons with disabilities will receive a 60 percent discount on vehicle tax.
- Vehicles older than 20 years displayed in public museums will be exempt from annual vehicle tax.
- Fire engines, ambulances, and hearses will not be charged vehicle tax.
- Modified scooters up to 150cc designed for use by persons with disabilities will be exempt from vehicle tax.
- Vehicles seized and auctioned by government bodies or judicial authorities will require the auction buyer to pay tax only for the fiscal year in which the auction was completed. Previous years’ vehicle tax will be waived.
- Vehicles held by traffic offices for a long time due to traffic violations, legal cases, or unidentified owners will be investigated. Taxes, fees, and penalties will be collected after identifying the vehicle owner.
- Vehicles kept as evidence in courts or judicial bodies will not be charged vehicle tax for the period they remain unused until the case is settled.
- Payments made through connected electronic payment systems approved by the transport authority will not require additional verification for renewal if they appear in the Vehicle Registration System (VRS).
- Vehicle owners whose vehicles were lost and later recovered will receive exemption from vehicle tax, renewal fees, and penalties for the lost period after submitting required police documents.
- Owners of two-wheelers that no longer physically exist or are unusable can remove vehicle records by paying current fiscal year tax and renewal fees by mid-January 2027 (Poush end). All penalties on vehicle tax and renewal fees up to FY 2025/26 will be waived.
