Government Preparing Revised Relief Plan After Amendments to VAT Imposition on Electricity Charges

Officials have indicated that the government is preparing to amend its initial decision to impose tax on electricity charges. The decision requiring a five percent value-added tax (VAT) on electricity consumption exceeding 50 units per month faced widespread criticism. Meanwhile, Finance Minister Swarnim Wagle stated during the parliamentary session on Ashar 11 (June 25) that “the decision will be adjusted so that final consumers do not bear excessive burden.”

According to Amrit Lamsal, spokesperson for the Ministry of Finance, the finance minister’s proposal to make the VAT on electricity charges simpler and more appropriate is in its final stage. He added, “The Inland Revenue Department has drafted guidelines for this and these will be published once approved.” Minister Wagle also informed that discussions are ongoing with the Energy Minister on this matter, mentioning, “Decisions benefiting consumers and the general public will be announced effective from Shrawan 1 (July 16).”

Shrawan 1 falls on a Friday. Shaligram Bhandari, assistant spokesperson for the Ministry of Energy, stated that since this issue falls under the Finance Ministry’s jurisdiction, he is not aware of the details. While there may have been ministerial discussions, he said he remains uninformed. An official from the Inland Revenue Department said the guidelines have been sent to the ministry and remarked, “A decision could be made within a few hours.”

Finance Ministry spokesperson Amrit Lamsal has also not provided detailed statements on the matter. When presenting the budget for fiscal year 2083/84, Finance Minister Swarnim Wagle had noted, “A provision has been made to levy VAT with relief on electricity consumption above 50 units for end consumers.” According to information from officials, a five percent VAT was decided for consumption exceeding 50 units per month.