Oli Government’s New Tax Policy Upthrusts the Demand of Electric Vehicles
June 1, 2021
The air pollution in Nepal is rising at an alarming rate. Not to forget, only a few months back on January 4, Kathmandu’s air quality reached the worst level- the Air Quality Index read 500 (AQI values at or below 100 are considered normal). Gases emitted from vehicles cover 70% of the Air Pollution; a solution to it could be switching from petroleum vehicles to electric vehicles.
Last year’s budget had stabbed everyone willing to switch to electric vehicles on the back by imposing a hefty tax on them. Former Finance Minister Yubraj Khatiwada imposed heavy excise duties on electric vehicles; users were charged 30-80% excise duties depending on their capacity and customs duty of 60%. This led to a spike in the price of electric vehicles making them harder to afford than petroleum vehicles.
This year, PM KP Oli’s government under a new finance minister has reformed the tax policy for the Electric vehicle. This new policy takes off the heavy excise duties and brings the custom duties down to 10% which is the same rate imposed in 2016.
Nepal plans to accelerate the replacement of all petroleum vehicles with electric vehicles or at least more use of e-vehicles than petroleum vehicles by 2031. As neighboring countries like India and China are planning to discard new petroleum vehicles, Nepal joins the hands in this step towards environmental conservation. Nepal Electricity Authority (NEA) has already initiated a step by signing a contract with the Wanwang Digital Energy Corporation in China for the installation and maintenance of 50 electric-vehicle charging ports across Nepal.
Furthermore, this year’s budget is in favor of electric goods and home appliances too- the government has cut tax, removed excise duties, and suppressed the customs duty to only 1% on these devices. This is high time for all of us to support the Government’s policy making an informed decision by picking up an electric ride.