Nepal Govt Raises Import Tax on Affordable Electric Vehicles!

HIGHLIGHTS

Budget 2080/81 levied additional import duty charges on EVs under the 100kW Category.
Popular mid-segment EVs will increase in price by 15-20%.
However, there is a decrease in duty charges on EVs above the 100kW Category.

The Government unveiled the new Budget for 2080/81 yesterday.

Import Tax Raised on Electric Vehicles in Nepal!

This will bring new price changes for the four-wheeler EVs in Nepal. According to the new policies, the EV prices for categories under 50kW-100kW, 100kW-200kW, and 200kW-300kW will be affected.

Interestingly enough, the Government has increased the tax for the 50kW-100kW category EVs. Whereas, the tax on 100kW-200kW and 200kW-300kW categories have been decreased.

EV Tax Changes in Nepal

50 kW to 100 kW

10% excise duty and 15% customs duty will be levied on EVs in this category. Previously, there were no excise charges and customs duty was capped at 10%.

This category includes the most popular EV products, which will directly affect the general public.

Tata Nexon EV, Neta V, and Hyundai Kona EV will likely increase their price by 15-20%.

101 kW to 200 kW

20% excise duty and 20% customs duty will be levied on EVs in this category. It gets a 10% decrease on both excise and customs duty.

Hyundai Ioniq 5, BYD Atto 3, and MG ZS EV will likely decrease in price by 20%.

201kW to 300kW

45% excise duty and 40% customs duty will be levied on EVs in this category. The custom charges have been reduced by 5%.

Premium EVs will likely decrease the price by 5%.

301kW and Above

It remains the same as before, getting 60% excise duty and 60% customs duty.

Please reference the following table for new tax changes in EVs in Nepal for 2023/24.

Motor Capacity	Budget 2080/81	Budget 2079/80
50 kW to 100 kW	10% Excise Duty – 15% Customs Duty	0% Excise Duty – 10% Customs Duty
101 kW to 200 kW	20% Excise Duty – 20% Customs Duty	30% Excise Duty – 30% Customs Duty
201 kW to 300 kW	45% Excise Duty – 40% Customs Duty	45% Excise Duty – 45% Customs Duty
Above 301 kW	Same as Before	60% Excise Duty – 60% Customs Duty

Why Increase Tax on 100kW EVs?

According to data released by the Department of Customs, Nepal imported a total of 2995 units worth 8.41 Arba of electric four-wheelers from mid-July 2022 to mid-May 2023.

As per the data, the EVs under the 50-100kW category had significant imports.

Coming in at 2882 units of EVs (under 50kW-100kW), 66 units of EVs (under 100kW-200kW), and 7 units of EVs (under 200kW-300kW).

Going by the statistics, the Govt has lost the opportunity to collect significant revenue from EV imports in the 50kW-100kW category.

Perhaps, the Budget 2080/81 looks to balance the EV imports across its categories and improve revenue collection.

That may be one of the reasons to increase the duty charges on EVs under the 50kW-100kW category and decrease duty charges on other EVs categories with higher-powered motors.