KATHMANDU: The decision to keep electric vehicle (EV) taxes unchanged in the fiscal year 2025/26 budget has elated the Nepali automobile industry.
There were concerns in the automobile industry about a possible hike in EV taxes. However, Finance Minister Bishnu Prasad Paudel retained the existing tax structure, signaling policy continuity and the government’s commitment to promoting clean mobility.
Industry leaders have welcomed the budget, calling it encouraging for Nepal’s transition to clean mobility. “It’s a welcome move that the government has kept EV taxes unchanged,” said Ritu Singh Vaidya, President of the Nepal Automobile Importers and Manufacturers Association (NAIMA). “However, it is disappointing that the budget did not take a more proactive approach toward hybrid vehicles.”
Rajan Babu Shrestha, Vice President of the NADA Automobiles Association of Nepal, said the budget is balanced. “There are some good provisions, especially for those looking to invest in charging infrastructure. By maintaining the current tax rates, the government has offered a sense of stability to the industry,” he said.
Yamuna Shrestha, Managing Director of Cimex Inc, the official distributor of BYD in Nepal, said the new budget would boost the confidence of the private sector. “Keeping taxes stable was a wise move. It encourages the private sector to invest more in areas such as charging infrastructure,” she added.
Shrestha explained that the five-year income tax exemption for charger assembly industries, along with a reduced 1% customs duty on necessary raw materials, would open up promising opportunities. “We are planning further steps in coordination with our parent firm to this end,” said Shrestha.
Similarly, Nirakar Shrestha, Executive Director of Laxmi Group, which assembles four-wheelers in Nepal, termed the budget a step in the right direction. “The budget will provide stability in the industry. However, additional support would have helped strengthen the local assembly and promote more value addition within the country,” he added.
Suresh Kumar Upreti, General Secretary of NADA, said the budget has addressed most of their demands, including keeping EV rates unchanged and building an international-standard exhibition hall at Bhrikuti Mandap.
Likewise, Meghraj Paudel, director of Alpha Automotive, the authorized distributor of Royal Enfield in Nepal, said policy continuity will bode well for the industry.
