Nepal Budget 2083/84 Simplified

The Government of Nepal has unveiled a budget of NPR 2,124 billion for Fiscal Year 2083/84, around 8 per cent larger than the current fiscal year. Financing comes primarily from NPR 1,405 billion in revenue, alongside foreign grants, foreign debt and internal borrowing. This note sets out the objectives, priorities, allocations and taxation updates in simplified form.

Based on the Budget Speech for FY 2083/84. Position as at 1 August 2026.

Executive summary

• The Government of Nepal unveiled an NPR 2,124 billion budget for FY 2083/84, representing an 8 per cent increase over the current fiscal year.
• Budget financing will primarily be generated from NPR 1,405 billion in revenue, alongside foreign grants, foreign debt and internal borrowing.
• The Finance Minister stated that the budget is designed to establish good governance through policy, legal, institutional and procedural reforms, while ending policy indecision and inefficient governance practices.
• The budget emphasises production-based economic growth, technology-driven development, artificial intelligence, investment promotion, and coordinated economic transformation through the effective use of new technologies and diaspora networks.

Objectives of the budget

Priorities of the budget

1. Energy and clean industrialization: hydropower, green hydrogen, and AI compute on clean energy.
2. Agriculture and forest-based green economy: commercial farming, GI products, and non-timber forest products (NTFPs).
3. Tourism, information technology and innovation: Visit Nepal 2085, an AI compute centre, and a technology hub.
4. Human capital: education, skills and health restructuring, with diaspora mobilisation.

Budget overview

Total budget for FY 2083/84 is NPR 2,124 billion, split across three heads:

Where the money comes from

Allocation of budget, year on year

Figures in NPR lakhs, comparing the FY 2083/84 estimate against the FY 2082/83 estimate and expected utilization.

Sources of revenue, year on year

Figures in NPR lakhs, comparing the FY 2083/84 estimate against the FY 2082/83 estimate and revised estimate.

Key highlights

• Economic growth target set at 7 per cent, with inflation to be maintained within 6 per cent.
• A paperless, faceless and contactless tax assessment system to be implemented, alongside integration of all economic transactions into digital systems.
• Maximum personal income tax rate reduced by 10 percentage points, with the personal income tax exemption threshold to be raised to NPR 1 million.
• Scattered taxes to be consolidated into a green tax, with excise duty on 360 goods to be abolished.
• Customs tariff slabs to be reduced from 11 levels to 7 levels, alongside a reduction of customs duty on 273 types of raw materials.
• NEPSE to be restructured, with capital gains tax on share trading to be treated as final tax.
• No additional approvals to be required after Investment Board approval, alongside provisions facilitating foreign investment and profit repatriation for NRNs.
• Electric public transportation to be operated in Kathmandu, with immediate PPA approval to be provided for hydropower projects below 10 MW.

Major reforms

• Government restructuring: ministries reduced from 22 to 18; 31 entities abolished, 6 merged, 6 transferred and 18 restructured; estimated saving of NPR 20 billion.
• NEA unbundling: split into three companies covering generation, transmission, and distribution/trade, finally executed.
• PPA reform: lapsed-permit projects cancelled; new PPAs on a “take-or-pay” basis; sub-10 MW projects to get immediate PPA; dry-season pricing.
• Alternative finance: offshore NPR bond, Green Energy Bond, Diaspora Bond, and an Alternative Development Finance Fund.
• Sovereign wealth fund (“Matribhumi Kosh”): for an AI Factory, with provision for a three-month fuel reserve.
• National Asset Management Company (NPL/NBA): to be established by Poush-end.
• Stock exchange (NEPSE): restructuring with a phased rollout of intraday trading, short-selling, derivatives and GDR.
• Commercial bench/tribunal: for fast disposal of commercial disputes.

Tax highlights

• Introduction of a 3 per cent equity tax on all fees charged by private sector educational institutions and health service providers.
• Businesses prohibited from making cash payments exceeding NPR 25,000 at a time.
• CSR expenses made deductible up to 1 per cent of taxable income.
• Safe Harbour Rules introduced under the transfer pricing provisions.
• Advance tax on capital gains from sale of SEBON-listed shares revised to 7.5 per cent for holdings exceeding 365 days and 10 per cent for holdings of 365 days or less.
• Advance tax on gains from sale of land and private buildings revised to 7.5 per cent for ownership of 5 years or more and 10 per cent for ownership below 5 years.
• Ride-sharing operators required to collect 1 per cent advance tax and 5 per cent VAT on taxable amounts.
• Limit for deductible donations and gifts to exempt organizations increased from NPR 100,000 to NPR 300,000.

Revised salary income tax slabs

Unified slabs for single and couple taxpayers:

Tax highlights continued

• Excise hike: tobacco and liquor/beer excise increased.
• VAT: a 10 per cent VAT discount (amended from refund) at invoice issuance for digital payments.
• CGT: capital gains tax on listed securities made final for individuals, with no further adjustment.
• Section 57, Income Tax Act 2058: not attracted on involuntary transfer on death, or on ownership change in holding resident entities.
• IT sector: 100 per cent exemption on sweat equity for the IT workforce.
• Agriculture processing: 10-year income tax holiday, with a VAT waiver on cold-store, packaging and testing lab machinery.
• Cinema halls outside metros and sub-metros: 10-year full income tax holiday.
• EV import: customs duty shifted from a peak-power basis to ad valorem (value), with a “Clean Infrastructure Investment Fee” at import.
• Revenue Investigation Department abolished: functions transferred to line agencies.
• Audit window: tax audit period fixed at 3 years as the limitation period, with AI-based e-assessment.

Key tax amnesty

• Litigation-withdrawal amnesty: for any tax dispute pending in court or before quasi-judicial bodies, initiated either by the Department or the taxpayer, if the taxpayer pays the assessed tax plus only 1 per cent additional (“tip”) within the prescribed period of Poush 2083, and withdraws the case, then all fees, penalties, fines, tip charges, late fees and interest are fully waived.
• Taxes and fee waiver: companies registered under the Companies Act 2063 that have failed to file returns on time, complete renewal, or pay applicable taxes, fees, charges, interest or penalties will be eligible for relief. Such companies may either continue their business operations or opt for cancellation of registration by complying with the prescribed requirements. If they submit all outstanding tax, fees, charges and required details for FY 2082/83 within the deadline of Ashoj end 2083, compliance will be considered regularized, and all prior dues including taxes, fees, charges, interest and penalties shall be fully waived in accordance with law.

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