Nepal Government Reverses Controversial 3% Equity Fees After Public Backlash

Prime Minister Balendra Shah has abruptly reversed a controversial decision to impose a 3% "equity fee" on private education and health services, just days after the levies were introduced. The announcement, made via social media, signals a swift response to widespread public outcry against the new fiscal measure. However, the move has immediately sparked legal and procedural questions, as the fees were incorporated into the Finance Act, a law passed by both houses of parliament.

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Implementing the three percent equity fee on private education and health services as proposed would impose an additional financial burden on the general public and create unnecessary hardship.

Legal experts argue that a prime minister's social media post cannot unilaterally overturn legislation. They emphasize that any amendment to taxes enacted through the Finance Act requires adherence to the same constitutional process, including formal Cabinet approval and established legal procedures. The government had initially introduced the fees to fund social welfare programs, aiming to improve education and healthcare in remote areas and support disadvantaged children.

In explaining the reversal, Shah cited consultations with Finance Minister Swarnim Wagle, stating that implementing the fees would place an undue financial burden on the public. He reiterated the government's commitment to listening to public sentiment and reviewing policies that draw dissatisfaction. The prime minister also confirmed that the existing policy requiring private hospitals to reserve 10% of beds and private colleges to allocate 10% of seats for disadvantaged citizens would continue.

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Our commitment to listening to the people remains firm. If the public expresses dissatisfaction with any policy, the government will always be prepared to review and improve it.

Despite the prime minister's announcement, questions linger about whether the decision received formal Cabinet endorsement, as government sources indicated it was not discussed in the preceding Cabinet meeting. Finance Minister Wagle described the move as a suspension rather than a permanent withdrawal, asserting that in a parliamentary system, the prime minister's word is final. He confirmed that the decision to suspend the fees was reached through mutual consultation, mirroring the process used when introducing them.

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In a parliamentary system with a strong prime minister, what the prime minister says is final. We consulted each other when introducing the fees, and the decision to suspend them was also reached through mutual consultation.