KATHMANDU: The government has reduced the Road Development Fee (RDF) on entry-level electric vehicles priced up to Rs 2 million. The fee has been cut from 5 percent to 2.5 percent through an amendment to the Finance Bill 2026.
The Finance Bill introduced on May 29 had imposed a 5 percent RDF on EVs worth less than Rs 2 million. Following criticism from the EV industry and consumers, the government revised the provision and reduced the fee by half.
The amendment was made by adding Clause 5 to Schedule 4 of the Finance Bill. According to the revised provision, EVs classified under customs headings 8703.80.91 and 8703.80.99 with a transaction value of up to Rs 2 million will now attract a 2.5 percent road construction fee at the time of import.
The 5 percent RDF remains unchanged for EVs priced above Rs 2 million.
Finance Minister Dr. Swarnim Wagle said the correction was made after identifying errors in the original financial bill. He stated that reducing the RDF by 50 percent will lower the price of small electric cars.
The government has also changed the EV taxation system through the budget for FY 2026/27. Earlier, customs duty on EVs was determined based on motor peak power. The new system calculates taxes based on vehicle value.
Under the revised structure, all EVs will attract a 20 percent customs duty. In addition, a Clean Infrastructure Investment Fee ranging from 2.5 percent to 130 percent has been introduced based on vehicle value.
EVs priced up to Rs 2 million will attract a 2.5 percent fee. Vehicles valued between Rs 2 million and Rs 3 million will be charged 20 percent, while those priced between Rs 3 million and Rs 4 million will face a 35 percent fee. The rate rises to 90 percent for EVs worth Rs 4 million to Rs 5 million and 130 percent for vehicles priced above Rs 5 million.
A 13 percent VAT will continue to apply to all electric vehicles.
