The Nepal government on Tuesday withdrew the 3% equity tax imposed on the private education and health sectors following widespread public criticism over the measure. In a social media post, Prime Minister Balendra Shah said the decision was taken after the proposed levy raised concerns about an additional financial burden on the public.Following consultations with Finance Minister Swarnim Wagle, the government decided not to implement the equity tax on private education and health sectors “for now”, Shah said.The 3% levy was introduced in last month’s budget for the new fiscal year and came into effect on July 17.
PM says government responded to public concerns
Shah said the tax was introduced to broaden the tax base and make the economy more organised. However, after taking note of public feedback, the government decided to suspend its implementation.The proposal had drawn criticism from citizens, the media and political parties.”This government is people-centred, based on the trust and expectations of the people. Our main goal is to establish good governance and ensure that all citizens experience a quality life,” Shah said.He added that the government remained committed to addressing public concerns while pursuing the goal of building an equitable society.”The reactions from citizens at the grassroots level toward the equity tax have drawn serious attention from the government. Our commitment to moving forward while listening to the people’s demands and building an equitable society remains unwavering and clear.”All decisions of the government are and will be made with the welfare of the citizens at the centre. If citizens are dissatisfied with any decision, the government will always be ready to revise and amend it,” the prime minister said. Opposition seeks rollback of electricity VATWelcoming the decision, the main opposition Nepali Congress urged the government to also withdraw the 5% value-added tax (VAT) on household electricity consumption, which came into effect in the current fiscal year.The government had announced the 5% VAT last month on household electricity consumption exceeding 50 units a month, triggering widespread criticism.”Electricity is no longer a luxury but a basic necessity. It is essential for cooking, education, information technology, small industries, electric vehicles and many other daily activities. It is therefore not appropriate to impose additional tax on household electricity consumption,” Nepali Congress Parliamentary Party leader Bhishma Angdambe said.He urged the government to immediately withdraw the tax and instead encourage greater use of electricity by households.