New Tax Plans for Electric Vehicles Sparks Criticism

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New Tax Plans for Electric Vehicles Sparks Criticism

Since the announcement of tax hike  on import of electric vehicles in the Federal Budget for FY2020/21 on May 28, the government has been facing scrutiny from various quarters of the society for the environment un-friendly move with critics saying the hike in taxes has pronounced a death knell for the electric four-wheelers that have grown in popularity over the past two years. In his budget speech, Finance Minister Dr Yuba Raj Khatiwada announced that electric vehicles will be levied 30-80 percent customs duty and 5-80 percent excise duty, depending upon the capacity of the four-wheelers. As per earlier arrangements, importers were required to pay 10 percent in customs duty and 13 percent in value added tax (VAT).

Nepal Automobile Dealers Association (NADA) is the latest organisation to raise its voice against the massive increment of the tax rates. Issuing a press statement, the association said that the tax hike will make electric vehicles as costlier as internal combustion engine vehicles and hence will be less attractive to car buyers. “The proposed tax will make the electric vehicles more expensive for the general people. It will ultimately hinder the government’s policy to promote eco-friendly transport,” reads the statement. Similarly, NADA also urged the government to ease the lockdown so that people can return to their business and work. “Economic activities have been severely affected to the protracted closure. Now business activities need to be resumed by following health safety standards,” NADA said.

In the meantime, three organisations have also asked the government to scrap the taxes imposed on import of electric vehicles. In a joint statement, Electric Vehicle Association of Nepal (EVAN), Nepal Forum of Environmental Journalists (NFEEJ) and Clean Energy Nepal (CEN) said that the new budgetary arrangements will discourage electric vehicles and promote fossil fuel run vehicles.


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