KATHMANDU, June 28: The House of Representatives (HoR) has passed Finance Act 2025, which allows the government to implement the provisions of taxes enforced in the budget.
A HoR meeting held on Saturday endorsed the Finance Act with a majority vote. However, the meeting disproved all the proposals made for amendment of the taxes introduced in the budget for the Fiscal Year (FY) 2025/26.
Speaking at the HoR meeting, Finance Minister Bishnu Prasad Paudel said the Act has maintained priorities to expand the tax bases, control revenue leakages and bring the informal businesses in the tax brackets. “The Act has taken into consideration the interests of investors while revising the tax rates, while focusing on the stability in government revenue policy,” said Minister Paudel.
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The government has raised the pigouvian tax on alcohol and tobacco products citing the health hazards that these products can impose on the users. Likewise, the government has slapped an additional two percent luxury tax on gold and silver jewelries.
Traders concerned have even launched protests to pressurize the government to revise these taxes. Finance Minister Paudel, however, termed the questions on taxes as usual and added that the government has proposed to amend taxes only in the necessary cases.
Previously, the lawmakers had opined that the government must introduce the tax reform measures to facilitate domestic productions. Scrapping of green tax and effective implementation of pollution taxes, scrapping of luxury tax on gold-silver jewelries, making tax systems progressive and bringing in high income effectively under the tax brackets, among others, were the concerns raised by the lawmakers.
Member of Parliament Prabhu Sah said there is large misappropriation in revenue collection despite the government expanding the tax bases. Lawmaker Madhav Sapkota criticized the government for failing to ensure social responsibility despite the general people having been slapped with a heavy burden of taxes.
