The government has decided to maintain the existing tax and duty structure on the import of electric vehicles (EVs) for the upcoming fiscal year 2025–26, in a move aimed at promoting cleaner transport and increasing domestic electricity consumption.

Presenting the federal budget in Parliament on Thursday, Finance Minister Bishnu Paudel said, “To encourage the use of electric vehicles, reduce environmental pollution, and boost internal electricity consumption, all existing taxes and duties on such vehicles will remain unchanged.”

Electric vehicle imports in Nepal have surged over the past few years, supported by favourable tax policies, increased environmental awareness, and a growing charging infrastructure. The continuation of the current tax regime comes as part of a broader policy strategy to support green transportation in line with Nepal's climate commitments.

In addition to keeping the tax structure unchanged for EVs, the government has announced a concessional tax policy for industries involved in building EV charging infrastructure.

According to Minister Paudel, “The import of necessary equipment for establishing electric vehicle charging stations and assembly industries will be subject to only 1 percent customs duty, with exemption from all other applicable taxes and fees.”

Furthermore, the budget includes a provision to grant a five-year income tax exemption to industries involved in the production and assembly of EV charging stations and related infrastructure.

This initiative aligns with Nepal’s ongoing efforts to reduce its dependence on fossil fuels and promote the use of clean, renewable energy sources.

The country generates the majority of its electricity from hydropower and aims to make use of surplus electricity domestically by shifting to electric modes of transportation.