Finance Minister Swarnim Wagle has claimed that a 5 percent value-added tax (VAT) has been imposed on electricity consumption exceeding 50 units to develop infrastructure in the energy sector. Wagle said at a press conference held at the Finance Ministry on Sunday after the budget for the fiscal year 2083/84 was made public that a 5 percent VAT had been imposed to raise resources for infrastructure development in the energy sector.

The government has decided to impose VAT on electricity for the first time in Nepal through the budget. According to which, now 5 percent VAT will be levied on electricity consumption exceeding 50 units. Wagle vigorously defended the new system at the press conference.

He claimed that the burden of this tax on electricity will be very low for the common citizen, but it will help raise the necessary resources for the construction of the country's energy infrastructure.

'There are about 1.2 million households in Nepal that consume 51 to 150 units of electricity. The 5 percent VAT will impose an additional burden of only Rs 24 per month on them. There are only 200,000 households that use 151 to 250 units of electricity, and they use facilities like AC and EV fast charging. VAT will only cost them an additional Rs 25 to 102, he said. However, more than Rs 85 billion in energy infrastructure will have to be built. This will take 3 to 4 years. However, Finance Minister Wagle said that if the electricity tariff cannot be paid due to the imposition of VAT, it can be reviewed. There is an Electricity Regulatory Commission to determine the price of electricity. The rate can also be reduced in the future.