Nepal's New EV Tax, Explained: What the 2083/84 Budget Changes

On 29 May 2026, Finance Minister Dr. Swarnim Wagle presented Nepal’s budget for fiscal year 2083/84 (2026/27) — and it quietly rewrote the rules for how electric cars are taxed.^[1][2] For roughly a decade, Nepal taxed EVs by their peak motor power in kilowatts (kW). That system is now gone. In its place: a flat 20% customs duty on the car’s value, the abolition of excise duty, and a new, price-banded “Clean Infrastructure Investment Fee.”^[1][2][3]

The old system: taxed by motor power

Until this budget, an EV’s tax depended on how powerful its motor was. Lower-powered cars (≤50 kW) paid the least; high-performance EVs paid steeply more. And those rates had been climbing: the FY 2081/82 budget raised customs and excise across every bracket, and FY 2082/83 left them unchanged.^[5][6] The chart below shows how customs duty alone rose between FY 2080/81 and FY 2081/82.

The new system: taxed by price

From FY 2083/84, every electric four-wheeler pays the same 20% customs duty regardless of motor power, and excise duty is abolished entirely.^[1][2] Replacing excise is the new Clean Infrastructure Investment Fee, which scales with the car’s price band — gentle on affordable cars, heavy on expensive ones:

The week of confusion: a bill that got pulled

The rollout was messy. The Economic Bill 2083 as first published omitted the fee rate for the Rs 20–30 lakh band entirely, and the Finance Ministry pulled the bill from its website after the error was spotted.^[8] Several outlets had already printed an incorrect, incomplete set of figures, which is why you may still find conflicting numbers online. The Ministry later clarified that the Rs 20–30 lakh band fee is 20%, giving the corrected tiers of 2.5% / 20% / 35% / 90% / 130% used in the chart above.^[3][7]

What it costs you

The practical effect is higher prices on most EVs. Reported estimates put the increase at roughly +NPR 100,000 on entry-level EVs and +NPR 200,000–250,000 on popular mid-range models such as the BYD Atto 2, MG S5 and Deepal S05, rising to more than NPR 4 million on premium vehicles.^[4][9] In total-burden terms, mid-range EVs moved from roughly 63% to around 70% of value, while the most expensive cars now face well over 200%.^[4]

EVs are still the cheaper choice to import

Crucially, none of this erases the EV advantage. Petrol and diesel cars face customs plus an excise that scales steeply with engine displacement, plus the road fee and VAT — a combined landed burden often cited in the 200–300% range. A comparable EV, even after this increase, typically lands in the ~40–90% range.^[10] The gap narrowed; it did not close.

One genuinely good piece of news

The budget kept strong incentives for charging infrastructure: equipment to build EV charging stations carries just 1% customs duty with other duties waived, alongside a five-year income-tax holiday for charging-infrastructure businesses.^[1] Given that thin charging coverage is the biggest brake on adoption, that is a sensible place to keep the foot off the tax pedal.

Bottom line

Nepal moved EV taxation from “how powerful is the motor” to “how expensive is the car.” Affordable EVs are barely affected; mid-range and premium buyers will pay noticeably more. The direction of travel — rising EV duties, budget after budget — is the real signal: the extraordinary tax advantage that built Nepal’s EV market is being slowly dialled back. If you have been waiting to buy, the policy is unlikely to get more generous than it has been.