Shankar Pokharel Criticizes Government’s Unwise Decision to Increase VAT on Electricity Consumption

May 29, Kathmandu – Shankar Pokharel, General Secretary of the Communist Party of Nepal (Unified Marxist-Leninist), has strongly opposed the government’s decision to impose additional value-added tax (VAT) on customers consuming more than 50 units of electricity. Responding via social media on Saturday, Pokharel described the move as a misguided policy that undermines the development and consumption of the energy sector.

He questioned the rationale behind increasing the tax burden on electricity users, especially considering the government’s recent declaration of two public holidays intended to address petroleum price hikes and shortages. “Nepal is one of the richest countries globally in terms of water resources. At a time when domestic energy production and consumption should be encouraged, imposing extra taxes on electricity users only discourages the sustainable use of our natural resources,” Pokharel stated clearly.

Furthermore, Pokharel accused the government of attempting to suppress the use of electric vehicles (EVs) through the budget. Given the shortages and rising prices of petroleum products, he argued that this is precisely the time when “green energy” should be promoted. Instead, he said, the additional tax burden on electric vehicles is undermining such efforts. He urged the government to correct these decisions promptly if the aim is merely to increase revenues under the guise of expanding the budget.

Highlighting that electricity consumption increases when the government sells electricity for profit, Pokharel insisted that VAT should not be imposed on this to avoid burdening the public. Instead, he emphasized promoting electricity for import substitution and maximum use in productive sectors. He called for the VAT on electricity to be revoked, decisions to be made in the public interest, and for the government to respect and support domestic energy resources.