KATHMANDU, May 29: Unveiling what he described as a major overhaul of the country’s taxation system, Finance Minister Dr Swarnim Wagle on Friday announced a series of reforms aimed at easing the burden on taxpayers, encouraging investment and tightening government spending.
Presenting the national budget for the fiscal year 2026/27 during a joint session of Parliament, Dr Wagle said the government has significantly revised the tax regime as part of its broader economic reform agenda.
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Among the key measures announced, the annual tax exemption threshold has been raised to Rs 1 million, while income tax rates have been reduced by 10 percent. The government has also lowered customs duties on the import of 273 categories of raw materials in a move aimed at supporting domestic industries and boosting production.
In another major reform, multiple existing taxes will now be consolidated under a single “Green Tax” system, which the government says is intended to simplify taxation and promote environmentally responsible policies.
The finance minister also announced the revival of the state-approved lottery system, which had remained dormant for years.
Alongside tax reforms, the government plans to enforce strict austerity measures to curb public spending. According to Dr Wagle, the measures are expected to save the state around Rs 20 billion.
The announcements come as the government faces mounting pressure to stimulate economic activity, improve revenue collection and restore public confidence in the country’s fiscal management.
