KATHMANDU, July 17: As per the latest announcement by the Airlines Operators Association of Nepal, air service providers for domestic flights will begin collecting value added tax (VAT) by incorporating it into the airfares.

This change comes into effect from today, following the government's directive in the budget for the financial year 2023/24, which made it mandatory for air transport services to register for VAT.

A press release issued by the association states, "As per the government's provision outlined in the budget statement, we would like to inform all airlines affiliated with our association that the practice of including value added tax in the airfares will be implemented starting today."

Due to the inclusion of VAT in the airfares, passengers can expect a slight increase in the cost of domestic flights. Yeti Airlines Spokesperson Sudarshan Bartaula explained that the airfares for domestic flights will see a rise of approximately six percent.

It's important to note that the VAT will also cover fuel and airport taxes, and there will be no additional charges beyond the revised airfare.

 
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