Massive increase in customs and excise duty on electric vehicles angers environmentalists, citizens

Published On: May 30, 2020 09:00 AM NPT By: SHREE RAM SUBEDI

KATHMANDU, May 30: A new budget provision to revoke concessions and subsidies, while importing electric vehicles(EVs), has irked environmentalists, clean energy enthusiasts, and importers. 

Earlier, the electric vehicles were only levied 10 percent customs duty and VAT while importing. The government, in its budget announced Thursday, has increased the customs duty from 30 to 80 percent and excise duty from 5 percent to 80 percent depending upon the engine of these non-polluting vehicles. 

"The new measures would increase the prices of the EVs from 30 to 150 percent, according to Umesh Shrestha, the president of the Electric Vehicles Association of Nepal( EVAN). 

"This is sterilization of electric vehicles in Nepal," laments Shrestha, who chairs 20 different firms related to the electric vehicles import, that includes both two-wheelers and four-wheelers. 

"The move is against the government's own national and international commitments to encourage electric vehicles", said Bhusan Tuladhar, an environmentalist. 

In its Nationally Determined Contribution (NDC), submitted to the United Nations Framework Convention on Climate Change, Nepal has pledged to increase the share of EVs to 20 percent by 2020 from 2010 levels. Also, the same document mentions that Nepal would decrease its dependency on fossils in the transport sector by 50 percent by promoting electric vehicles.  

According to the Department of Transport Management, there are over 1.2 million motorcycles and more than 300,00 four-wheelers in Kathmandu. The number of four-wheel EVs is around two thousand  and two-wheelers nearly seven thousand, according to EVAN.

Vehicular emission is one of the major sources of pollution in Kathmandu, which is one of the most polluted cities in the World. A recently endorsed Kathmandu Valley Air Quality Management Action Plan  has emphasized the conversion of fossil fuel-run vehicles into electric ones with special measures to promote the use of EVs. Also, a white paper in the energy sector  prepared by the Ministry of Energy and Water Resources mentioned that 50 percent of all imported vehicles would be EVs by 2023. Bagmati Province, in its ambitious goal, aims to turn all vehicles to electric by 2028.

"The budgetary move looks toward short-term revenue gain, leaving behind associated risks of air pollution to  public health in Nepal," argued Tuladhar. 

According to the National Action Plan for Electric Mobility endorsed by the government in 2018, Air pollution contributes to an estimated 9,000 premature deaths in the Kathmandu Valley alone. According to Breathlife, a partnership campaign of WHO, UN Environment, World Bank, and Climate and Clean Air Coalition, a total of 37,399 annual deaths in Nepal are caused by air pollution, that includes both outdoor and indoor household air pollution

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