KATHMANDU, July 17: The government says the new taxes are aimed at broadening the revenue base and strengthening public finances. However, with taxes now extending to essential services such as education, healthcare and electricity, the additional cost is expected to be borne largely by consumers.
While higher taxes on luxury goods and services are generally seen as reasonable, imposing levies on private school fees, treatment at private hospitals and electricity consumption is likely to increase monthly expenses for middle-class households. Whether businesses absorb part of the additional cost or pass it entirely on to consumers will influence both market prices and spending patterns.
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Although the new measures, effective from the new fiscal year, are expected to boost government revenue, their most immediate impact will be felt in households' daily expenses.
The burden is likely to weigh more heavily on private sector employees. While government workers have received a modest salary increase, many in the private sector face rising living costs without a corresponding rise in income.
Taxes increased in these seven areas
- A 3 percent tax on private school tuition fees.
- Higher taxes on treatment at private hospitals, making healthcare more expensive.
- An additional 0.5 percent tax on the purchase of gold and silver.
- Casino royalty fees doubled.
- A 5 percent tax on electricity consumption above 50 units.
- A 5 percent service charge on ride-sharing services.
- Higher taxes on five-star hotels, resorts and imported alcoholic beverages.
