Why did finance minister revise tax rates after presenting Economic Bill to Parliament?

Nepal's Finance Minister Swarnim Wagle faces calls for a parliamentary investigation after tax rates were revised multiple times through the Economic Bill, sparking controversy over transparency and legal authority. The alterations were made after the budget for the fiscal year 2026-27 was presented to Parliament on May 29.

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Lawmakers have demanded a parliamentary probe into Finance Minister Swarnim Wagle after tax rates were revised multiple times through the Economic Bill.

Opposition parties have demanded a full parliamentary probe into the minister's actions, questioning the government's legal right to modify tax provisions post-budget presentation. The situation intensified when the initial Economic Bill uploaded to the Ministry of Finance website was replaced with a revised version the following day, which was later replaced again by a third revision.

These revisions introduced significant changes, including adjustments to Value Added Tax (VAT) on electricity and the road construction charge for electric vehicles (EVs). Initially, household electricity consumers using up to 50 units per month were to be exempted from VAT, but the provision also allowed VAT on electricity sold between businesses. The latest revision expanded this exemption to cover transactions between electricity businesses as well.

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The controversy has raised questions about transparency, legal authority and the process through which tax rates were altered after the budget was tabled in Parliament.

Regarding EVs, the revised bill stipulates a 2.5 percent road construction charge for vehicles valued at less than Rs2 million at customs clearance. This is a reduction from the previous 5 percent rate, a move likely to benefit buyers of entry-level electric vehicles. The original Economic Bill had maintained the 5 percent rate.

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The version currently available on the ministry’s website is a third revision of the bill.

The repeated changes have raised concerns among lawmakers about the process and legitimacy of altering fiscal policies after they have been formally submitted to Parliament, leading to demands for greater accountability and clarity.

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The revision effectively reduces the road construction charge for lower-priced electric vehicles, a move likely to benefit buyers in the entry-level EV market.