February 2, 2023, Thursday
Nepal 1:37:26 pm

The Govt.’s tax policy on EV changes every 6 month

Surendra Kumar Upreti, General Secretary-NADA

The Nepal Weekly
June 14, 2022

(NADA Automobiles Association of Nepal recently organized a media interaction programme showing protest against tax hike in electric vehicles in the new budget. NADA has expressed dissatisfaction over the government’s new tax policy. The automobile enterpreneurs during the occasion demanded immediate withdrawal of the increased tax on electric vehicles in the budget for the Fiscal Year 2079/80. NADA general secretary Surendra Kumar Upreti has complained that the government has not given priority to electric vehicles for prevention of environment pollution. During a brief encounter with The Nepal Weekly NADA’s General Secretary Upreti, has expressed his dissatisfaction over the recently unveiled tax rates by the government through new budget announcement. NADA’s main concern is about the increment of tax and excise duty on import of electric vehicles above 100 KW.)

The Nepal Weekly: What is your main concern regarding the new tax imposed by the government on electric vehicles?

 Surendra K. Upreti: NADA has repeatedly said that the state has the right to fix the tax, but the government should take into consideration long-term impact while formulating any rules and regulations. The government has changed the rules regarding the excise duty three times in the past two years. That is to say, when any investor or consumer buys a car, the price changes in every six month and we are not sure what will happen in the next six month’s period. Such a situation will definitely affect the customers as well as traders. Therefore, it is our advice to make a concrete policy and rules for 5 or 10 years with long term vision.

 With the new tax regulation coming into effect, the entrepreneurs who have been selling electric vehicles have been complaining that we will no longer be able to sell vehicles above 100 kW. The public electric vehicle used by the general public will be definitely more than 100 KW. In this way how can the government fulfill its promise to promote electric vehicles in the country?

TNW: The government has imposed new tax only on electric vehicles above Rs. 5 million, i.e. above 100 KW battery capacity, so that it can be used by ordinary people. Don’t you think its practicle?

According to the government, up to 100 kilowatts is for the general public and above that is for the wealthy and considered as luxurious. At present, vehicles with a capacity of 150 kW are cheaper than 100 kW. So how can the government get what it said? Or the government should have imposed excise duty on the basis of price, rather than on the basis of kilowatts.

TNW: Didn’t NADA make suggestions to the government before the budget for electric vehicles was announced?

Of course, NADA should do these things with detail workouts, which suggests that it is good for both business people and consumers. If the government really wants to discourage fuel run vehicles and go for electric ones, we have provided detail suggestions. However, our suggestion to give priority to electric vehicles did not get place in the new budget.

TNW: How many electric vehicles and models (brands) are currently available in Nepali market?

There are many electric vehicles in operation in Kathmandu at present. But no one has the exact data about this. Because the EVs are coming every day and there is increase in the number of vehicles arriving every day. At present, there are 15-16 companies importing EV in Nepal. I think in the next one year, there will be more than 30 companies importing electric vehicles into Nepal.

TNW: What about the EV charging station in Kathmandu?

 We are always ready to build charging stations under public-private partnership. In Kathmandu and other places, the government should arrange the basic things (lights, parking, etc.) for the construction of charging stations. We (NADA) are always ready to cooperate with the government for the charging station and also provide land for the construction of the charging station. The government had promised to build electric vehicle charging stations in different parts of the country but has not been able to do so. Everyone who drives an electric vehicle is being charged individually. At present, Nepal Electricity Authority has set up a charging station in Kathmandu, while other companies have set up individual charging stations in their premises.

TNW: Why aren’t most people preferring electric vehicles at present?

The excise duty on petrol-powered public vehicles is only five per cent but the excise duty on electric vehicles has gone up from seven to one thousand per cent. In such case, why would people buy an electric car? Due to lack of availability of basic infrastructure, electric vehicles have not got enough priority among the customers. Secondly, the corresponding roads have not been constructed in some places. But there is a tendency among the people here to switch to EVs as it helps in reducing environmental pollution.  So now the people have just started recognizing the importance of electric vehicle and it will take some time to create awareness among the general public regarding the EVs.