The government has introduced a 10-year income tax exemption for new cinema halls established outside metropolitan and sub-metropolitan areas, a move that has been widely welcomed by stakeholders in the film industry.

Presenting the budget for fiscal year 2026-27 in Parliament on Friday, Finance Minister Swarnim Wagle said the measure falls under the “investment promotion and protection” framework aimed at encouraging private sector participation in expanding cultural infrastructure.

“I have made a provision for full income tax exemption for 10 years for those establishing new cinema halls outside metropolitan and sub-metropolitan areas,” Wagle said during the budget speech.

The announcement has generated optimism within the film sector, particularly among cinema hall operators who believe it will help expand screening facilities to underserved areas.

Chairperson of the Film Association of Nepal Narendra Maharjan said the provision would not only encourage investors but also help extend cinema halls to municipalities where such infrastructure is still lacking. He noted that Nepal currently has 170 cinema halls, down from around 450 in earlier years, with several closures during the COVID-19 period.

Maharjan expressed hope that the tax incentive would help reverse the decline in cinema halls and support expansion into new locations.

Director of “Pashupati Prasad”, Dipendra K Khanal, said the budget addresses a long-standing demand of the film fraternity. He said expanding cinema halls would broaden the audience base and strengthen the overall film industry.

“We have been consistently raising the need to increase cinema halls. More halls mean a wider market and better business opportunities,” Khanal said. He added that the provision would also improve revenue prospects for filmmakers.

Filmmaker Manoj Pandit said the budget provides encouragement not only to cinema hall operators but also to the wider creative sector. He noted that increased investment in exhibition infrastructure would contribute to the development of cinema as an industry.

However, director Nabin Subba said the budget has only partially addressed the demands submitted by filmmakers, who had called for a broader reform package.

Subba said stakeholders had proposed a five-year reform project covering infrastructure development, skilled workforce training, and inclusive content support for marginalised communities, but only a limited aspect of those demands has been included.

He also expressed disappointment that proposals for a dedicated “film village” and development of indoor studio infrastructure were not included. Subba said filmmakers had suggested using the Film Development Company’s land in Balaju for such a facility.

The budget also does not include previously discussed projects such as the under-construction film shooting studio in Sanga, Kavre, and the Dolakha Film City.

Rabindra Prasad Poudyal, information officer at the Ministry of Communications and Information Technology, said only key budget priorities are reflected in the speech and that sectoral projects listed under the LMBIS system would continue.