Despite the government’s aim to reduce reliance on import-based revenue, it continues to generate a significant portion of its income from imported goods. The Domestic Revenue Mobilization Strategy (DRMS) 2024 seeks to lower customs duties’ share of GDP from 4.8% to 4.5% and reduce import-based excise duty from 0.8% to 0.6% by 2028/29. However, import-based VAT is set to rise from 3.5% to 3.8%. The strategy focuses on increasing income tax contributions, particularly corporate tax, to raise public revenue to 23.5% of GDP by 2028/29. It emphasizes tax reforms, automation, and improved compliance, with digital service providers like Google and Meta now paying taxes in Nepal.
