EV Tax in Nepal

In recent years, the trend of electric vehicles (EVs) has been growing rapidly. One in every 5 cars sold in 2023 was an EV. People nowadays are attracted more to this environmentally friendly and sustainable alternative than a traditional engine car. 

Nepal too is leaning more and more towards the EV sector. In just the first 11 months of this fiscal year, Nepal's imports of electric vehicles (EVs) increased by 158.23%. Importers note that the Chinese multinational company BYD has now emerged as a dominant player in the Nepali market.

If you are looking to buy an EV soon, it is crucial to be aware of the tax rates. In this article, we will provide you with all the information that you need to know about the EV tax rate in Nepal. 

One of the leading EVs in the Nepali market: Tata Punch EV

What is EV Tax?

When importing vehicles from another country, taxes are often levied to cover the costs associated with customs and to regulate the vehicle market. These taxes, which can include import duties and VAT (Value Added Tax), serve multiple purposes. The tax rates for electric vehicles in Nepal have undergone significant changes in recent years. These taxes levied on imported vehicles are one of the major sources of government revenue. 

Current EVs Tax Rate in Nepal

• Customs Duty: For EVs under 50 kW, the customs duty rate has been increased from 10% to 15%. For EVs over 300 kW, the rate has jumped from 60% to 80%. These changes are intended to balance the government’s revenue needs with the promotion of EV adoption.

• Excise Duty: Smaller EVs (under 50 kW) now face a 5% excise duty, while larger EVs (over 300 kW) are taxed at 50%. The excise duty for mid-range EVs (50 kW to 300 kW) varies, with rates typically increasing as the vehicle's power capacity increases.

• Value-Added Tax (VAT): VAT remains at a flat rate of 13% for all EVs. This rate is the same for every stage of production and distribution.

• Registration Fee: The registration fee varies depending on the type and power capacity of the EV. Typically, smaller EVs have lower registration fees, while larger, more powerful vehicles incur higher fees.

Also read: Deepal S07

EV Tax in Nepal

Over the years, there has been a significant rise in tax rates levied on EVs. 

Concluding Remarks 

It is important to understand taxes if you're thinking about buying an electric vehicle in Nepal. While these taxes do increase the overall cost, they also help fund the government for infrastructural development. Even with recent tax hikes, EVs in Nepal still enjoy lower taxes compared to traditional vehicles, making them a good choice for those who care about the environment.

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