Finance Minister Wagle Says EV Prices Under Rs 5 Million Set to Decline Following Tax Reforms

Kathmandu. Finance Minister Swarnim Wagle has said that the prices of electric vehicles (EVs) priced below Rs 5 million are expected to decrease following recent adjustments in the tax structure.

Speaking at a programme organized by the Nepal Association of Financial Journalism (NAFIJ) in Kathmandu on Monday, the finance minister said that EV prices in the lower and mid-range segments would come down under the revised fiscal arrangements.

Referring to Prime Minister Balendra Shah’s directive against increasing taxes on vehicles valued under Rs 5 million, Wagle stated that the final price of EVs would become more affordable in the current fiscal framework. He explained that for a vehicle with a CIF (cost, insurance, and shipment) value of Rs 2 million, the final retail price, including taxes, could settle at around Rs 4.2–4.3 million.

He further informed that the road development fee on electric vehicles has been reduced by half, while customs duty remains fixed at 20 percent. Value Added Tax (VAT) will continue to be applied at 13 percent.

Wagle also said that under a revised approach based on the principles of luxury and progressivity, a Clean Infrastructure Investment Fee (CIIF) has been introduced. He added that the new system is expected to reduce unhealthy competition in the electric vehicle market.

He noted that as Nepal moves towards expanding public electric transportation, charging stations will be developed in major cities across the country. He also said that under the “Kathmandu Vision 2040” framework, electric mobility will be prioritized within the Kathmandu Valley.

According to the Economic Bill introduced by the government, the previous motor power-based internal tax on EVs has been scrapped and replaced with a price-based clean infrastructure development fee. Under the new structure, EVs with a CIF value up to Rs 2 million will be taxed at 2.5 percent.

Similarly, vehicles priced between Rs 2 million and Rs 3 million will be subject to a 20 percent fee, those between Rs 3 million and Rs 4 million at 35 percent, Rs 4 million to Rs 5 million at 90 percent, and above Rs 5 million at 130 percent.

Earlier, EVs were taxed based on motor capacity, with excise duties ranging from 5 percent for up to 50 kilowatts to 50 percent for vehicles above 301 kilowatts. The government has now scrapped the entire power-based excise duty structure.

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