Budget 2083/84 introduced 5% VAT on ride-sharing and on electricity for end users, gave the government power to set multiple VAT rates, turned the 10% VAT refund on digital payments into an instant rebate, and tightened digital invoicing.
1. A 5% VAT rate for two services
From 2083/84, VAT is charged at 5% — not the standard 13% — on:
- ride-sharing services provided by drivers registered on a resident ride-sharing platform, and
- electricity supplied to end users.
Ride-sharing platforms must also collect the VAT from drivers at the point of transaction.
2. Power to set multiple VAT rates
The government can now set more than one VAT rate, none above the standard rate, by notice in the Nepal Gazette, naming the goods and services each rate applies to. A high-level advisory committee is to study and recommend a multi-rate structure.
3. Digital payments: rebate instead of refund
When a consumer pays digitally for goods and services named in the Department's notice, they get an immediate rebate equal to 10% of the VAT, replacing the earlier refund.
4. Stricter digital invoicing
- The Department can require named taxpayers to register with the Central Billing Monitoring System (CBMS) and issue invoices digitally, or use the Department's billing system.
- The Department sets guidelines for the security and reliability of invoicing software and devices.
- Under the Income Tax Act, using invoicing software that can delete or modify invoice data attracts a Rs 5,00,000 charge, and other e-invoice non-compliance Rs 1,00,000.
5. Amending a VAT return
A return filed on time can be amended within 7 days of submission through the prescribed procedure.
6. Filing where there is no Inland Revenue Office
Taxpayers in districts without an Inland Revenue Office can submit returns and tax to the local level or the district Office of the Financial Comptroller General within 15 days of the month of submission.
7. Relief on past VAT
- VAT not collected by businesses making or repairing gold and silver jewellery, utensils and idols for 2082/83 and earlier is remitted.
- Registered businesses that didn't collect or file VAT can settle periods up to Chaitra 2082 by paying the tax plus 1% by the end of Poush 2083 — see the settlement schemes.
What businesses should do
- Check whether your invoicing software keeps an unchangeable record of every issued invoice.
- Watch for Gazette notices on new VAT rates and the goods they cover.
- If you run a ride-sharing or electricity business, update your VAT rate and returns.
New to VAT? Start with VAT in Nepal explained.
Sources
- Institute of Chartered Accountants of Nepal (ICAN), Highlights of Federal Budget of Nepal FY 2083/84 — amendments to the Income Tax Act, 2058 and the Value Added Tax Act, 2052.
- Inland Revenue Department, ird.gov.np — Acts, rules, notices and the taxpayer portal.
Last checked: 15 September 2026 (Bhadra 30, 2083). Tax law changes with each Finance Act — confirm your own situation with the Inland Revenue Department or a registered tax professional.