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🇳🇵 Nepal /Economy & Trade

Budget offers 10-year tax holiday for cinema halls outside major cities, film sector welcomes move

From Kathmandu Post · () English

Summarized and contextualized by DistantNews.

At a glance

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  • The Nepalese government announced a 10-year income tax exemption for new cinema halls established outside major cities to promote private sector investment in cultural infrastructure.
  • This move is expected to encourage investors and help expand screening facilities to underserved areas, reversing the decline in cinema halls since the COVID-19 pandemic.
  • While welcomed by many in the film industry, some filmmakers noted that the budget only partially addressed broader reform demands, excluding proposals for a film village and indoor studio infrastructure.

Nepal's government is offering a decade-long income tax holiday for new cinema halls built outside metropolitan and sub-metropolitan areas. Finance Minister Swarnim Wagle presented this "investment promotion and protection" measure in the budget for fiscal year 2026-27, aiming to boost private sector involvement in cultural infrastructure.

I have made a provision for full income tax exemption for 10 years for those establishing new cinema halls outside metropolitan and sub-metropolitan areas.

— Swarnim WagleFinance Minister Swarnim Wagle announcing the tax exemption during the budget speech.

The film industry has largely welcomed the initiative, seeing it as a crucial step to expand screening facilities into areas lacking such amenities. Narendra Maharjan, Chairperson of the Film Association of Nepal, noted that the country's cinema hall count has fallen to 170 from around 450 previously, partly due to COVID-19 closures. He expressed hope that the tax incentive would help reverse this trend and encourage new ventures.

The provision would not only encourage investors but also help extend cinema halls to municipalities where such infrastructure is still lacking.

— Narendra MaharjanChairperson of the Film Association of Nepal commenting on the potential impact of the tax incentive.

Filmmakers like Dipendra K Khanal, director of "Pashupati Prasad," believe more halls will broaden the audience base and improve business opportunities, ultimately strengthening the film industry. Manoj Pandit echoed this sentiment, stating that investment in exhibition infrastructure supports cinema's development as an industry.

We have been consistently raising the need to increase cinema halls. More halls mean a wider market and better business opportunities.

— Dipendra K KhanalDirector Dipendra K Khanal expressing his view on the importance of expanding cinema halls.

However, some in the film fraternity feel the budget falls short of their comprehensive demands. Director Nabin Subba pointed out that stakeholders had proposed a wider reform package, including skilled workforce training and support for marginalized communities, which was only partially addressed. He also expressed disappointment over the exclusion of proposals for a dedicated "film village" and indoor studio facilities.

The budget provides encouragement not only to cinema hall operators but also to the wider creative sector.

— Manoj PanditFilmmaker Manoj Pandit on the budget's impact on the creative sector.
DistantNews Editorial

Originally published by Kathmandu Post. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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