The Revenue Advisory Committee formed for fiscal year 2025-26 has submitted its report with recommendations to improve Nepal’s tax system, revenue structure, and administrative framework.

The committee emphasised reforms in policy, law, structure, and procedures across sectors such as internal revenue, customs, trade and investment. It prioritised broadening the tax base, revising tax rates, strengthening tax administration, simplifying processes, and using technology, according to the finance minister’s secretariat.

On internal revenue, the panel recommended including all economic activities within the tax net and expanding the tax base. It suggested broadening the electronic service tax to cover digital transactions, classifying real estate transactions as business activities, and improving capital gains tax transparency through digital tools.

The report urged the integration of taxpayer data and simplifying income tax slabs. It also proposed implementing e-assessment and faceless audit systems and aligning retirement fund management with institutions like the Social Security Fund.

Further, it recommended tax incentives for foreign investment, private equity, and venture capital, and updating tax laws to align with federal governance.

Regarding customs, the committee stressed simplifying procedures, adopting globally recognised valuation standards, and modernising digital systems. It called for revising tariffs to protect domestic production, amending customs laws, and streamlining classification and inspection processes.

Support for import-substitution industries and coordinated border management using modern technology were also proposed.

In intergovernmental finance, the report advised establishing clear legal frameworks for revenue-sharing among federal, provincial, and local governments to remove duplication and strengthen budgeting mechanisms.

The committee recommended expanding the tax base, ensuring transparency, promoting digital systems, updating outdated laws, and improving coordination between the private and government sectors. The report is expected to serve as a guiding document for upcoming budget and policy formulation.