In 2024, the Government of Nepal has implemented a comprehensive tax structure for the import of electric vehicles (EVs) to promote sustainable transportation and reduce the country’s carbon footprint.
This blog post provides an in-dept look at the various taxed, duties, and incentives related to the import of EVs. highlighting the government’s efforts to make electric mobility more accessible and appealing to the Nepalese populations.
Background and Objectives
The Government of Nepal has been progressively moving towards an ecofriendly transportation model. With the increasing global focus on reducing greenhouse gas emissions, Nepal has aligned its policies to encourage the adoption of electric vehicles. The primary objectives are –
- To reduce dependence of fossil fuels.
- To cut down on air pollution in urban areas.
- To support global efforts in combating climate change.
Tax Structure of Electric Vehicles in 2024
The tax structure for importing electric vehicles into Nepal in 2024 includes several components-
| Vehicle Types | Current Tax | Upcoming Tax |
| EV CAR, JEEP, VAN | ||
| Up to 49KW | Rs. 5000 | Rs. 5000 |
| 49 to 125KW | Rs. 15000 | Rs. 15000 |
| 125 to 225KW | Rs. 20000 | Rs. 20000 |
| above 225KW | Rs. 30000 | Rs. 30000 |
| EV Motorcycle and Scooter | ||
| Up to 50W | Rs. 1000 | Rs. 1000 |
| 50 to 350W | Rs. 1500 | Rs. 1500 |
| 350 to 1000W | Rs. 2000 | Rs. 2000 |
| 1001 to 1500W | Rs. 2500 | Rs. 2500 |
1. Custom Duty –
- Small EVs (Passenger Cars, Motorcycles, and Scooters) – A reduced customer duty of 10% is applied to electric passenger cars and two-wheelers, significantly lower than the rates for traditional internal combustion engine vehicles.
- Medium and Large EVs (SUVs, Buses and Trucks) – The customs duty for larger electric vehicles is set at 15% providing an incentive for commercial and public transportation sectors to switch to electric.
2. Excise Duty –
- The excise duty on electric vehicle is notably lower compared to fossil fuel vehicles. For small EVs, it ranges from 5% to 10%, while for medium and large EVs, it stands at 12%.
3. Value Added Tax (VAT)
A standard VAT rate of 13% is applicable across all electric vehicles. However, the government offers VAT refunds for businesses and individuals investing in electric commercial fleets, promoting wider adoption in the public transport sector.
4. Road Tax and Registration Fees –
The road tax for electric vehicles is significantly reduced by 50% compared to traditional vehicles. Registration fees also see a similar reduction, making the overall cost of owning an electric vehicle more attractive.
5. Environmental Duty –
As part of its environmental initiatives, the government imposes a minimal environmental duty of 1% on the import of electric vehicles. This duty is used to fund green projects and further initiatives to enhance environmental sustainability.
Incentives and Benefits
To complement the reduced taxes, the Government of Nepal offers several incentives to encourage the adoption of electric vehicles –
1. Subsidies and Grands –
Direct subsidies are available for individuals’ buyers and businesses purchasing electric vehicles. These subsidies can cover up to 20% of the vehicle’s cost for small EVs and up to 25% for commercial electric buses and trucks.
2. Charging Infrastructure Development –
The government has allocated funds for the development of nationwide EV charging infrastructure. Importers and businesses setting up charging stations receive tax breaks and grants to facilitate widespread accessibility.
3. Green Loans –
Financial institutions, under governments directives, provide low-interest green loans specifically for the purchase of electric vehicles. These loans offer favorable terms to ease the financial burden on buyers.
4. Exemption from Odd-Even Traffic Rule –
Electric vehicles are exempt from the odd-even traffic rule implemented in urban areas to reduce congestion and pollution, providing an added convenience for EV owners.
Impact and Future Outlook
The revised tax structure and incentives in 2024 aim to make electric vehicles more financially viable and appealing to a broader audience in Nepal. By significantly reducing the cost burden associated with importing and owning electric vehicles, the government hopes to accelerate the shift towards sustainable transportation.
Future Outlook
Increased EV Adoption –
The favorable tax regime is expected to boost the adoption rates of electric vehicles among private and commercial users.
Enhanced Public Transport –
With lower taxes and subsidies, public transport operators are likely to transition to electric buses, reducing urban pollution levels.
Economic Benefits –
Reduced expenditure on fossil fuel imports and an increase in local green job opportunities in the EV and renewable energy sectors.
Final Conclusion –
The Government of Nepal’s tax policies on electric vehicles in 2024 reflect a strong commitment to environmental sustainability and the promotion of green technology.
By reducing customs and excise duties, providing subsidies and fostering the development of EV infrastructure, Nepal is paving the way for a greener, cleaner future.
This strategic approach not only addresses environmental concerns but also offers economic and social benefits, making electric vehicles an attractive option for Nepalese customers.