Bijay Damase

Kathmandu: Serpentine queues of electric vehicles, mostly four-wheelers, can be seen at present at the Rasuwagadhi and Tatopani customs points on Nepal's northern border.

Government officials are suspicious about a significant surge in the import of both four-wheelers and two-wheelers powered by electricity in recent times. This uptick is believed to be driven by apprehensions of impending tax hikes in the budget for the upcoming fiscal year (FY), slated to be announced on May 28.

The import of electric vehicles has increased due to the lower tax rates compared to vehicles powered by petroleum products, significantly impacting the government's revenue from vehicle imports

According to the data of the Department of Customs, the government collected revenue of Rs 90 billion from the import of vehicles and their parts in the fiscal year 2078/79, which dropped to Rs 33.33 billion in the last fiscal year 2079/80. In the first nine months of the current fiscal year 2080/81, the department has collected Rs 39.89 billion in revenue from import of vehicles.

As revenue from vehicle imports, a primary source of government income, has significantly decreased, importers of electric vehicles are concerned about potential tax hikes in the upcoming budget.

A representative of SPG Automobile, the seller of the Omoda-5 electric vehicle, told New Business Age that he strongly believes that the tax rate imposed on EVs will increase to some extent due to the increase in the import of electric vehicles and the decrease in the import of petroleum-based vehicles.

Amidst such suspicions of the importers, the northern customs offices are busy clearing the customs of the growing number of electric vehicles. Nepal also imports the largest number of electric vehicles from China, which surpasses the world in the production and export of electric vehicles.

Dayanand KC, Chief Customs Officer of Tatopani Customs Office, told New Business Age, "Electric Vehicles are being imported at the rate of 50/60 vehicles per day. A total of 416 electric vehicles in the month of Chaitra (mid-March to mid-April) while more than 600 EVs have arrived in the month of Baisakh (mid-April to mid-May)."

According to KC, 70 vehicles entered through the checkpoint on Saturday alone. 

Last year only 219 vehicles entered through this point.

"The increase in import of electric vehicles has also disturbed other vehicles used in transporting goods at the border," KC said, adding, "As of Saturday, 1,136 vehicles have arrived from China this year."

According to KC, there is a significant contribution to the revenue of Tatopani Customs due to the high volume of electric vehicles imported in the current year.

"Tatopani Customs is collecting the most revenue from electric vehicles and the contribution is expected to be even more this year," he said.

According to the customs officials, the importers may have imported a large number of electric vehicles in a hurry due to fear that there will be a policy change in the budget.

Similarly, the import of electric vehicles through Rasuwagadhi customs has also increased. Rasuwagadhi Customs Office Chief Ram Prasad Pathak said that BYD cars, Joy Long micro bus, King Long micro electronic bus and vans are entering through the checkpoint on a daily basis. According to him, 50 such vehicles enter through Rasuwagadhi Customs daily.

According to the Rasuwagadhi Customs Office, 3,981 electric four-wheelers have been imported from Rasuwagadhi as of Sunday of the current fiscal year. The customs office has collected revenue of Rs 4.19 billion from the import of EVs. In the last fiscal year, 2,073 such vehicles entered through the same channel from which the government collected Rs 1.13 billion in revenue.

"We have not achieved the revenue collection target yet because the target has been set quite high. However, the contribution of electric vehicles to the revenue is still high," Pathak told NBA.