KATAHMANDU: seven provinces have announced various tax and penalty waiver schemes for vehicle owners through their budgets for the fiscal year 2026/27
The provinces have targeted vehicle owners who have not paid vehicle tax for a long period, failed to renew registration, or have not completed the required deregistration process.
The waiver schemes cover annual vehicle tax, renewal fees, deregistration charges, advance tax payment and penalties. The percentage of waiver and deadline for receiving the benefits vary from province to province.
The schemes are expected to benefit both vehicle owners and provincial governments. Vehicle owners can avoid heavy penalties, while governments can collect pending revenue. Vehicle owners must clear the required taxes within the given deadline to receive the benefits.
Vehicle tax waiver schemes by provinces
Koshi Province
Koshi Province has provided a waiver for public and private vehicles with pending vehicle tax for more than five years. If owners want to remove such vehicles from records, they can pay only the vehicle tax of the latest fiscal year by the end of June 14, 2027. All remaining taxes, fees and penalties will be waived.
The province has also provided a 60 percent vehicle tax discount for public passenger vehicles with 14 or more seats if they provide fare discounts to students, senior citizens and persons with disabilities.
Similarly, vehicles operating direct services from border areas to tourist destinations inside Koshi Province or other provinces by carrying only tourists from neighbouring countries will receive a full vehicle tax waiver during the Koshi Province Tourism Year campaign.
Madhesh Province
Madhesh Province has announced a full waiver of vehicle tax for fiscal year 2026/27 for vehicles damaged and made unusable during the Gen Z movement.
Owners must submit an application with official proof and complete the deregistration (scrapping) process by October 17, 2026 to receive the benefit.
Bagmati Province
Bagmati Province has provided a 100 percent penalty waiver on vehicle tax and registration certificate renewal charges for public vehicles older than 20 years.
Owners of such vehicles can clear up to 20 years of pending vehicle tax and renewal charges by December 16, 2026 and remove the vehicles from official records.
The province has also provided a full waiver on previous renewal fees and penalties for transport-related training centres, workshops, factories and reconditioning businesses that have not renewed their registration. They can pay only the latest renewal fee by December 16, 2026
Gandaki Province
Gandaki Province has allowed long-pending vehicles to be removed from records by paying vehicle tax and renewal fees from fiscal year 2026/27 until the current period.
Other fees and penalties will be waived if the deregistration process is completed by May 14, 2027.
The province has also provided a full waiver of vehicle tax, renewal fees, deregistration charges and related penalties for vehicles destroyed in vandalism and fire incidents on September 2025 Gen Z incident. Owners must complete the deregistration process by May 14, 2027.
Lumbini Province
Lumbini Province has allowed owners of private vehicles that have regularly paid tax for up to 20 years but are currently not in operation to deregister their vehicles.
Owners must pay pending tax of the latest two years and apply by May 13, 2027. Remaining taxes and penalties will be waived.
The province has also changed the deadline for vehicle tax payment. Owners must now pay tax within 90 days after the expiry of the bluebook renewal period or by the end of the fiscal year, whichever comes first.
For vehicles that were registered in the past but have not paid annual tax or renewed registration, Lumbini has provided a 50 percent waiver on total vehicle tax penalties if they pay tax and complete renewal by January 14, 2027.
Karnali Province
Karnali Province has provided a penalty-free deregistration facility for vehicles that no longer physically exist or are unusable due to age.
Owners can remove such vehicles from records by the end of June 14, 2027, after paying vehicle tax and renewal fees for the latest three fiscal years.
The province has also announced a 20 percent tax discount for vehicle owners who pay five years of vehicle tax in advance in a single payment.
Sudurpaschim Province
Sudurpaschim Province has provided a 100 percent waiver on vehicle tax and renewal penalties for vehicles that have not paid required taxes and have not been renewed for five years or more.
Owners can benefit from the waiver by completing the required tax payment and renewal process within the specified period.
