Nepal’s budget for Fiscal Year 2082/83 was presented by Finance Minister Bishnu Prasad Poudel on 15 Jestha 2082 (29 May 2025), with a total size of NPR 1,960 billion. This note sets out the objectives, priorities, allocations and taxation updates in simplified form.
Its key goals are to reduce poverty through sustainable growth, generate employment via entrepreneurship and investment, boost economic efficiency with modern technology, ensure social justice, and enhance public services and governance.
In this article, we walk through the budget as presented, covering how much has been allocated and to what, where the money comes from, what flows to provinces and local levels, and the tax measures and amnesty provisions that accompany it.
Objectives of the Budget
The budget sets out five objectives.
- To alleviate poverty by achieving high and sustainable economic growth.
- To create employment by promoting entrepreneurship and expanding public and private investment.
- To enhance economic efficiency through the increased use of modern technology.
- To establish social justice through social protection and development.
- To promote quality public services and good governance.
Priorities of the Budget
01. Promotion of entrepreneurship, employment, production, and a productive economy.
02. Expansion of investment in result-oriented and quality physical infrastructure.
03. Qualitative improvements in the social sector, ensuring balanced development and social security.
04. Citizen-friendly services, control of corruption, and improvement in governance.
Budget Overview
The total budget for FY 2082/83 is NPR 1,960 billion, distributed across three heads.
| Head | Amount | Share |
|---|---|---|
| Recurrent Expenditure | NPR 1,180 billion | 60.1% |
| Capital Expenditure | NPR 407.89 billion | 20.8% |
| Debt Financing | NPR 375.24 billion | 19.1% |
Revenue Sources
Financing for the budget is drawn from four sources.
| Source | Amount | Share |
|---|---|---|
| Revenue Generation | NPR 1,310 billion | 67% |
| Domestic Borrowing | NPR 362 billion | 18% |
| Foreign Loans | NPR 233.66 billion | 12% |
| Foreign Grants | NPR 53.45 billion | 3% |
Allocation of Budget, Year on Year
Figures in NPR lakhs, comparing the FY 2082/83 estimate against the FY 2081/82 estimate and expected utilization.
| Budget Head | 2082/83 Est. | % | 2081/82 Est. | % | Expected Utilization | % |
|---|---|---|---|---|---|---|
| Current Expenditure | 11,809,800 | 60% | 11,406,645 | 61% | 10,099,354 | 61% |
| Capital Expenditure | 4,078,880 | 21% | 3,523,540 | 19% | 2,939,036 | 18% |
| Financial Management | 3,752,420 | 19% | 3,672,845 | 20% | 3,585,262 | 22% |
| Total Budget Allocated | 19,641,100 | 100% | 18,603,030 | 100% | 16,623,652 | 100% |
Sources of Revenue, Year on Year
Figures in NPR lakhs, comparing the FY 2082/83 estimate against the FY 2081/82 estimate and revised estimate.
| Revenue Head | 2082/83 Est. | % | 2081/82 Est. | % | Revised Est. | % |
|---|---|---|---|---|---|---|
| Revenue | 13,150,000 | 67% | 12,603,030 | 68% | 11,278,710 | 68% |
| Internal Debt | 3,620,000 | 18% | 3,300,000 | 18% | 3,300,000 | 20% |
| Foreign Debt | 2,336,631 | 12% | 2,176,735 | 12% | 1,695,996 | 10% |
| Foreign Grant | 534,469 | 3% | 523,265 | 3% | 348,946 | 2% |
| Total | 19,641,100 | 100% | 18,603,030 | 100% | 16,623,652 | 100% |
Intergovernmental Fiscal Transfers
Key figures for transfers to provinces and local levels under the fiscal year plan.
| Transfer | Provinces | Local Levels |
|---|---|---|
| Equalization Grants | NPR 60.66B | NPR 88.97B |
| Special Grants | NPR 3.27B | NPR 9.78B |
| Conditional Grants | NPR 30.35B | NPR 211.46B |
| Supplementary Grants | NPR 3.28B | NPR 10.06B |
Conditional grants total NPR 241.81B. Revenue sharing is estimated at NPR 165B, and the total transfer estimate across all sources is NPR 582.83B.
Key Highlights
Sovereign Wealth Fund: The government will create a fund to channel remittances into productive sectors, supporting infrastructure, fiscal discipline, and social welfare, though detailed plans are pending.
VAT Removal: VAT on digital payment services has been eliminated to promote digital transactions.
Business Support: Loan restructuring, increased working capital, interest penalty relief, and easier loan access will help revive affected businesses.
Women’s Entrepreneurship: Registration and renewal fees for female-owned industries are waived to encourage women-led businesses.
- Removal of the bank guarantee provision to acquire an EXIM Code.
- Debt financing without collateral at an interest rate of 3% per annum for young entrepreneurs.
- Hotels and resorts to receive tax incentives and to be treated as a special industry.
Major Reforms
- ‘Local Currency Linked Bonds’ to be issued, with foreign currency payments linked to Indian rupee fluctuations.
- VAT on digital payment services has been removed.
- Advance income tax at customs on food items like grains, fruits, vegetables, and animal products has been abolished.
- Income from the export of IT services abroad will be taxed at only 5%.
- The government plans to establish a fully digital Neo Bank by fiscal year 2082/83.
- Time-based electricity charges to be introduced.
- Plant variety to be regarded as intellectual property.
Tax Highlights
The budget introduces a Health Risk Tax to be levied and collected on goods imported from abroad and those produced within Nepal, as specified in Schedule 6 of the Finance Bill.
All retirement funds previously approved by the Inland Revenue Department must, by the end of Ashadh 2083 B.S., be affiliated with one of the retirement funds established under the Employees Provident Fund Act, 2019, Citizen Investment Trust Act, 2047, Social Security Fund Act, 2074 and Retirement Fund Act, 2075.
The VAT refund (10% of the VAT amount) on payments made through electronic means under Section 25(1Kha) of the VAT Act was required to be refunded into the taxpayer’s bank account. This has now been amended to state that the refund should be made immediately.
The budget has removed the compulsory tax payment liability in cases where there is no turnover or taxable income, by introducing an additional clause that requires taxpayers to explicitly opt in for this provision to apply in the relevant income year.
The provision for collection of advance tax at the point of import through customs has been removed by repealing Section 95k(7) of the Income Tax Act, thereby eliminating the requirement to deduct advance tax on imports of certain goods.
Key Tax Amnesty
- If a resident entity in Nepal has received a revised income tax assessment due to ownership transfer under Section 57(1) of the Income Tax Act, 2058, and the tax liability is still pending, such entity can settle the assessed tax by the end of Ashadh 2082 B.S. Upon doing so, the interest and fees associated with that revised assessment will be waived.
- Hotels, resorts and industry have now been included alongside special and information technology (IT) industries, and are eligible to receive the same tax concessions and special incentives as those granted to special and IT industries.
- The turnover limit for the 100% tax exemption on startup businesses in the first five years is raised from up to 1 crore to up to 10 crore.
- Industries producing green hydrogen shall be exempt from income tax for five years from the date of commencement of business.
- Industries manufacturing or assembling electric vehicle (EV) charging machines that use electric energy shall be exempt from income tax for five years from the date of commencement of business.
- Persons who establish and operate an industrial area or industrial village shall receive a 100% income tax exemption for the first ten years from commencement of business, followed by a 50% exemption for the subsequent five years.
Read the Original Briefing
The full briefing, including the original formatting and charts, is reproduced below and available to download.