Govt moves to amend laws governing citizen investment and employee provident funds

KATHMANDU: The government is set to amend the Citizen Investment Trust Act, 1990 and the Employee Provident Fund Act, 1962 in a bid to expand investment avenues and provide affordable housing for government employees.

According to the Ministry of Finance, the proposed amendments aim to address longstanding structural limitations and implement commitments made in the current fiscal year’s budget. The changes also reflect recommendations made by the High-Level Economic Reform Recommendation Commission.

The Ministry has issued a public notice seeking feedback on the draft bills prepared to revise both laws. In accordance with Section 6(2) of the Legislative Act 2024, the ministry has asked concerned stakeholders to submit suggestions via email to [email protected] within 10 days of the notice’s publication.

One of the main goals of the amendment is to legally authorize the Citizen Investment Trust, the Employee Provident Fund, and the Social Security Fund to invest in private equity and venture capital. This provision, outlined in Clause 330 of the Fiscal Year 2025/26 Budget Statement, is a key reason for the legislative changes, according to the ministry.

Similarly, Clause 350 of the same budget statement outlines the government’s plan to enable these funds to jointly invest in housing projects and to offer land and housing to employees at subsidized interest rates through installment plans. This policy measure also necessitates legal reform to ensure its effective implementation.

The ministry stated that existing provisions in both Acts have posed operational challenges, which the proposed amendments aim to resolve.

Officials also emphasized that the amendments will contribute to the promotion of citizens’ fundamental rights and human rights. By broadening the scope of fund investments, the changes are expected to enhance returns for contributors and boost the sectors where the funds invest—thereby supporting economic growth.

The government maintains that these revisions will enhance financial efficiency without imposing additional fiscal or financial burdens on the funds.