KATHMANDU: The government is set to remove the 5 percent value-added tax (VAT) imposed on electricity consumption.
The decision follows an agreement reached between Minister for Energy, Water Resources and Irrigation Biraj Bhakta Shrestha and Finance Minister Dr. Swarnim Wagle on Sunday.
According to sources, Finance Minister Wagle agreed to the proposal put forward by Energy Minister Shrestha to scrap the tax. The proposal is now being prepared to be tabled at the upcoming Cabinet meeting for formal approval. Once the Cabinet approves the decision, the 5 percent VAT on electricity will be lifted.
The 5 percent VAT was introduced by Finance Minister Wagle through the budget for the current fiscal year, targeting households consuming more than 50 units of electricity per month. Prior to this, the two ministers had held multiple discussions on the matter without reaching a conclusion.
An official from the Ministry of Energy stated that the Finance Minister’s agreement during their recent meeting has cleared the path for the policy change. The formal implementation process will commence once the Cabinet makes the final decision.
