Budget Nepal FY 2078/79 Top Highlights (Auto Sector)

May 30th 2021

3 mins read

Budget Nepal FY 2078/79 Top Highlights (Auto Sector)

Here are the Top Highlights of the new Budget Speech for FY 2078/79 for the Automobile Industry in Nepal.

Top Budget Highlights on Automobile Sector

163 billion budget allocated for Transport Infrastructure in Nepal

In the Budget Speech of the Fiscal Year 2078-79, Finance Ministry has allocated a total of 163.37 billion for the development of transportation infrastructure in Nepal.

Finance Minister Bishnu Prasad Poudel has mentioned that the budget will be spent on the construction of necessary infrastructure to increase the use of road networks, railways, and electric vehicles.

The allocated budget will be employed on the Expansion and upgrading of major highways, construction of strategically important roads connecting China, completion of 300 new bridges, construction of flyovers and tunnels in urban areas, construction of signature arch bridges, technology management of the Department of Transportation, construction of railways, development of water transport.

Moreover, the new budget also states the operation of 100 Electric Buses and the construction of 500 new charging stations across the Valley.

Government plans to shift to fully electric vehicles by 2088 BS

With Nepal Government, slowly spinning its pace with positive plans on the EV sector, has announced in yesterday's budget speech, a policy to fully electrify the auto sector by 2088 BS. In 10 years from now, the government has planned to replace all the petrol/fuel-based vehicles with electric ones.

In yesterday’s hearing from Hon. Finance Minister Bishnu Poudel, he had addressed that a task force of experts will be formed on the discussion of this issue.

Moreover, the government has also announced waiving off the renewal taxes for the next five years if the existing gasoline-based vehicle owners are interested in electrifying their automobiles.

Government reduces Excise Duties on Hybrids

The Nepal Government has finally reduced the excise duty on hybrid cars. This announcement has been made by Finance Minister Bishnu Poudel on yesterday’s hearing of Budget Nepal for FY 2078/79.

Earlier, excise duty was levied on plug-in hybrids and hybrids at different rates, but now on only 40% Excise Duty will be levied on both. Earlier, Hybrid vehicles were subjected to 60% Excise Duty.

Customs Duty on Electric Vehicles (EVs) reduced in Nepal

The Nepal Government has also reduced the customs duty currently levied on electric vehicles import in Nepal. The customs duty has now levied at 10-40%. In the last year’s Budget Speech for FY 2077/78, former Minister Dr. Yuvraj Khatiwada had increased customs and excise duties on both Hybrid and Electric vehicles.

As of the new budget released, the government has completely waived the excise duty on electric vehicles and the customs duty on EVs has also been reduced based on the motor capacity of vehicles.

Here are what the new financial ordinance has stated tax for EVs in Nepal,