The government has revised the Finance Bill multiple times within days of its initial publication, triggering questions over procedure and transparency in tax policymaking.

The bill, uploaded to the Ministry of Finance website on May 29, was removed the following day and restored a few hours later with changes in tax rates and provisions. Officials say the current version on the website is the third revision. By Tuesday, the bill had been altered four times since its initial release alongside the budget presented by Finance Minister Swarnim Wagle.

Each revision includes adjustments in tax rates.Certain provisions have been introduced or removed, prompting concerns among stakeholders over what they describe as repeated, informal changes to tax policy immediately after the budget announcement.

Former finance minister Surendra Pandey said the minister does have the authority to amend tax rates, but only through a defined legal process.

“Any amendment must be approved by the Cabinet and passed by Parliament,” Pandey said. “Tax rates cannot be repeatedly changed immediately after the budget is presented. Such repeated revisions without due process raise questions about the finance minister’s stability and create suspicion.”

He added that the manner of repeated changes could undermine confidence in the budget process.

Similarly, lawmaker and former finance minister Barshaman Pun accused the government of attempting to manipulate tax policy through arbitrary changes in the bill.

“In the past, only minor errors such as typographical mistakes or duplication were corrected. But never were new provisions introduced or tax rates significantly altered like this,” Pun said. He added that such actions raise suspicion of possible behind-the-scenes adjustments.

Finance Minister Wagle acknowledged that the bill had been revised, but said the changes were limited to technical errors.

“Two or three errors were identified. These were minor mistakes,” he said. “Parliament has already been informed. Up to 40 changes were made in the previous years as well.”

A comparison of the successive versions of the bill shows several key changes.

In the Value Added Tax (VAT) Act, the initial version exempted electricity consumption up to 50 units per household from VAT. It also implied VAT would apply to transactions between electricity producers and distributors, such as sales from hydropower developers to the Nepal Electricity Authority.

The revised version modifies this provision. It now states that VAT will not apply to electricity traded between electricity trading businesses, and that households consuming up to 50 units per month will also remain exempt.

The revised wording reads: “electricity traded between electricity trading businesses, and household consumption up to 50 units per month” will not be subject to VAT.

When asked about the change, the finance minister said he was unaware of the revision.

Second, the bill introduces a reduction in road construction duty on electric vehicles priced below Rs2 million. The duty, previously set at five percent for all vehicles, has been reduced to 2.5 percent for certain electric vehicles.

The revised provision states: “Notwithstanding anything mentioned elsewhere in the Act, motor vehicles falling under subheadings 8703.80.91 and 8703.80.99 with customs-assessed transaction value up to Rs2 million shall be subject to a 2.5 percent road construction duty.”

The minister said the reduction was intended to prevent price increases in smaller electric vehicles, adding that the provision had been agreed earlier but was omitted due to an oversight during drafting and legal review.

Third, the bill corrects a provision related to fuel customs duty and green tax. The earlier version appeared to apply a ten percent import charge on petrol and diesel. The revised version replaces this with a green tax of Rs10 per litre.

The change appears to correct what officials describe as an error in the earlier formulation, where ‘percentage’ was used instead of a fixed rupee amount.

Fourth, the government has added a provision to the Income Tax Act granting a 10-year tax exemption for cinemas established outside metropolitan and sub-metropolitan cities.

The finance minister had announced the measure in his budget speech, stating that new cinema halls outside major urban centres would receive full income tax exemption for ten years from the date of operation. However, this provision was missing from the initial version of the bill and has now been added in the revised draft.

Fifth, amendments have been made to allow tax deductions on insurance premiums and education expenses.

A new provision under Section 11 allows individuals to deduct either annual insurance premiums paid to resident insurance companies or Rs10,000, whichever is lower, from taxable income when calculating tax liability.

Another amendment permits individuals to deduct either 25 percent of annual education expenses paid for their children or Rs25,000, whichever is lower, from taxable income when calculating tax.

The revised bill states that such deductions will apply before final tax computation under the relevant section of the Income Tax Act.

These additions were part of the budget speech but were not included in the initial version of the Finance Bill and were incorporated later through amendments.