Nepal Budget 2079/80: Automobile sector highlights
"This year, the fiscal policy has an objective to curb the economy as a production-based economy which would be an effort to establish more employment opportunities and to dispose of imports by increasing imports."
The government has raised taxes on luxury items. The budget of the upcoming fiscal year 2079/80 presented by the Finance Minister Janardan Sharma on Sunday.
The tax on liquor, tobacco, expensive motorcycles, vehicles, big EVs, cosmetic goods and other items has been increased.
Two Wheelers
Motorcycles between 200cc-250cc will now impose an additional excise duty of 20 percent and 10 percent customs.
The government has increased excise duty on motorcycles between 200 and 250 cc by 20 per cent to 80 per cent. Earlier, excise duty was 60 percent in this range.
Similarly, the customs duty for motorcycles between 251cc-500cc has been increased to 70 percent while excise duty has been fixed at 80 percent.
The customs duty for motorcycles above 501cc has now been fixed at 80 percent.
Similarly, import of all motorcycles above 501 cc will be subject to 80 percent customs duty and 100 percent excise duty.
The government has reduced the tax rate on motorcycles / scooters with a capacity of less than 200 cc.
The government has reduced excise duty on motorcycles / scooters between 125 and 200 cc by 10 percent. The excise duty, which was 50 percent earlier, has been reduced to 40 percent.
Four Wheelers
The excise duty on mass-selling cars below 1500cc cars will remain same.
The excise duty on cars between 1500cc – 2000cc has increased by 5 percent to 75 percent. Earlier, it was 70 percent.
The excise duties on cars between 2000cc – 2500cc and 2500cc – 3000cc have also increased by 5 percent. These segments will now attract 85 and 95 percent excise duties respectively.
The cars above 3000cc will now impose an excise duty of 105 percent.
Electric Vehicle
Government increased excise and customs duty on EVs.
The government has announced a waiver of excise and customs on electric cars up to 100 kW capacity.
The government will establish charging stations in 85 places to encourage the use of EVs.
Electric cars with range of 100 kW to 200 kW will now attract a 30 percent excise and customs duty, whereas 45 percent excise and customs duty fixed on electric cars 201 to 300 kW capacity, and 60 percent excise and customs on electric cars above 300 kW capacity.
The new provision will have price hike in long range of EVs.
Excise Duty & Customs for Automobile Manufacturing Company
Finance Minister Janardan Sharma has announced that the government will provide incentives for companies looking to establish an electric four-wheeler industry in the country.
The government has announced to provide a 40 percent income tax exemption for electric car assembling industries on their earnings for five years.
Similarly, car companies looking to assemble combustion engine cars will get a waiver of 50 percent on the excise duty and 25 percent on customs duty.
While setting up manufacturing electric scooters units in Nepal will attract a 1 percent tax.
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