The National Assembly (NA) on Friday, July 4, passed the Finance Bill, 2082 and the National Debt Recovery Bill, 2082.

Earlier, on 28 June, the House of Representatives (HoR) had endorsed both bills by majority.

The motion to pass the bills, tabled by Deputy Prime Minister and Finance Minister Bishnu Paudel, was endorsed unanimously by the Upper House.

During the deliberations, Minister Paudel defended the imposition of a luxury tax on all ornaments, arguing that the measure aims to make gold transactions more transparent and to address concerns raised by the international community.

In the budget for the upcoming fiscal year 2025/26, announced on 29 May, the government imposed a 2% luxury tax on all jewellery—regardless of value—and a 13% VAT on diamond- and precious stone-studded ornaments.

Jewellers have strongly opposed the move, warning that it will hurt consumer demand, disrupt the market, and further strain an already struggling industry.

Previously, a 10% luxury tax was applied only to jewellery priced above Rs 1 million. The revised policy removes this threshold entirely.

Responding to queries raised during the clause-wise discussion on the Finance Bill, Minister Paudel underscored the importance of policy and legal reforms aimed at removing Nepal from the Financial Action Task Force (FATF) ‘grey list’.

Earlier this year, FATF—an intergovernmental body that monitors global compliance with anti-money laundering (AML) and countering the financing of terrorism (CFT) standards—placed Nepal on its grey list for the second time. The decision was made during its Plenary and Working Group Meetings in Paris, which concluded on 21 February.

Minister Paudel said that relevant provisions have been included in the bill to mitigate the impacts of being grey-listed.

“This will ensure transparency in gold transactions and bring the trade into the tax net, thereby curbing illegal activity,” he said.

On the National Debt Recovery Bill, 2082, Paudel asserted that the budget for the upcoming fiscal year is the strongest yet in terms of appropriations, revenue projections, international assistance, and foreign debt.

(With inputs from RSS)