Tax rate on entry-level electric vehicles increased

Kathmandu, May 30

The government has increased customs duties on entry-level electric vehicles.

The government has increased the customs and excise duty up to 15 per cent on entry-level electric cars, jeeps and vans, which are in high demand and are in use in Nepal.

The Finance Ministry has reduced taxes on mid-range EVs while it has not significantly increased taxes on high-end EVs.

This, experts say, is opposite to the government’s policy of increasing electricity consumption and moving towards zero carbon emissions.

According to the new budget, the government has increased customs and excise tax on electric cars between 50 to 100 kilowatts by 5 and 10 per cent respectively.

Vehicles in that bracket will now have to pay 15 per cent customs tax and 10 per cent excise duty. Previously, these vehicles did not have to pay excise duty.

Due to the new rate of tax, 100-kilowatt capacity vehicles will be 20 to 22 per cent more expensive, say businesses.

Tax on vehicles between 100 to 200 kilowatts, however, has decreased. The customs and excise duty on this range has gone down to 20 per cent. Earlier, both customs and excise duty were set at 30 per cent.

The government has maintained a 40 per cent customs duty on vehicles with a capacity of 200 to 300 kilowatts. Earlier, it was 45 per cent. Excise duty remains constant at 45 per cent on electric vehicles of this range.

The customs rate for vehicles with a capacity of more than 300 kilowatts has been maintained at 60 to 80 per cent. Earlier, the rate was set at 60 per cent. Excise duty is 60 per cent in this range.