KATHMANDU: The government has formally initiated the budget formulation process for the upcoming fiscal year 2026/27 with the formation of a Revenue Advisory Committee.
The committee was constituted through a ministerial decision on February 11 with the objective of collecting concrete suggestions on revenue policy, tax structure, customs rates, revenue administration and broader macroeconomic reforms prior to drafting the budget.
According to Finance Ministry Spokesperson Tanka Prasad Pandey, the committee has already begun its work under the coordination of the Revenue Secretary at the Ministry of Finance.
The committee includes representatives from the government, the central bank, academia and private sector umbrella organizations. Members comprise the Head or a designated senior professor from the Central Department of Economics at Tribhuvan University, a Joint Secretary from the Ministry of Industry, Commerce and Supplies, an Executive Director from Nepal Rastra Bank, and two experts (an economist and a tax expert) nominated by the Finance Ministry.
Private sector bodies represented in the committee include the Federation of Nepalese Chambers of Commerce and Industry, Nepal Economic Association, Confederation of Nepalese Industries, Nepal Chamber of Commerce, Nepal Industry Commerce Federation, and the Federation of Nepal Cottage and Small Industries. A Joint Secretary from the Revenue Management Division of the Finance Ministry has been designated as Member-Secretary.
The committee has been mandated to recommend policy and legal reforms relating to income tax, value-added tax (VAT), excise duty, education service fee, digital service tax, e-commerce taxation and other internal taxes under the Financial Act. It will also suggest revisions to tax rates, simplification of procedures, improvements in tax systems, and reforms in revenue administration and organizational structure.
In addition, the panel will provide recommendations on industrial promotion and protection, import-export policies, service trade, investment promotion, supply management, and tax and non-tax incentives.
Customs-related reforms, including tariff revision, domestic production protection measures, valuation system improvements, trade facilitation, border management and customs administration reforms, are also within its scope.
The committee will further study and suggest measures to control revenue leakage, illegal trade, foreign exchange regulation, economic crimes and asset laundering, including necessary legal and institutional reforms.
Sector-specific revenue and policy reforms in agriculture, energy, tourism, civil aviation and natural resource management have also been incorporated into the mandate.
It will review issues seen in banking, financial institutions, insurance, remittance, capital markets, cooperatives and real estate transactions, and recommend solutions related to revenue mobilization.
The identification of new non-tax revenue sources, rate determination and revision, resolution of tax duplication among federal, provincial and local governments, and intergovernmental revenue management and sharing reforms are also key areas of focus.
The committee will conduct comparative analyses of international, regional and national economic trends and recommend measures to expand the tax base, introduce or abolish taxes where necessary, and consult with experts, industrialists and entrepreneurs before finalizing its proposals.
To ensure effective functioning, the Finance Ministry has formed nine thematic sub-committees, covering internal revenue, customs, revenue leakage control, industrial and export promotion, agriculture and tourism, financial sector issues, non-tax and intergovernmental revenue management, macroeconomic analysis, and anti-money laundering strategies, including measures related to exiting the FATF grey list.
The Finance Ministry has invited suggestions from concerned government bodies, private sector organizations, academia, stakeholders and the general public regarding tax policies to be adopted in the upcoming budget.
Sub-committees are expected to submit their reports to the main committee by the end of Chaitra, while the final consolidated report is scheduled to be submitted to the Finance Minister by the end of Baisakh 2083.
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