New fiscal year introduces updated tax laws


July 17, 2023


New fiscal year introduces updated tax laws

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KATHMANDU: As the fiscal year 2023/24 begins, the government has put into effect several changes to tax laws that were previously announced.

These modifications involve alterations in tax policies, rates, and regulations that will have an impact on individuals, businesses, and other entities throughout the fiscal year.

Under the revised provision in the Income Tax Act 2002, individuals earning more than Rs 5 million annually will now face a 39 percent income tax. This adjustment came into effect on July 17. Previously, individuals earning above Rs 2 million were subjected to a 36 percent income tax.

Furthermore, the government has introduced a luxury tax for the first time, which entails a 2 percent tax on services provided by high-end hotels, restaurants, and resorts.

Moreover, a luxury tax of 2 percent has been imposed on precious metals valued at more than Rs 1 million.

According to the government’s budget announcement, the same tax rate will be applied to imported alcohol, as well as to items such as diamonds, pearls, and gold jewelry adorned with stones or made of precious metals, provided their value exceeds Rs 1 million.

Likewise, as of July 17, a 5 percent tourism fee has been implemented on foreign tour packages sold by travel agencies.