Nepal Govt Scraps 3% Equity Tax on Private Education, Health Sectors After Backlash

KATHMANDU, Jul 21: The Nepal government on Tuesday put on hold the recently introduced three per cent equity tax on the private education and healthcare sectors after facing strong opposition from the public, political parties and the media.

Prime Minister Balendra Shah announced the decision through a social media post, stating that the government reconsidered the measure after concerns emerged that it could increase the financial burden on ordinary citizens.

Shah said the decision was taken after discussions with Finance Minister Swarnim Wagle and clarified that the tax would not be enforced on the two sectors for the time being.

The levy, introduced in last month’s budget for the new fiscal year, had officially come into force on July 17. According to the government, the measure was initially aimed at widening Nepal’s tax base and improving the formal structure of the economy.

However, growing public dissatisfaction prompted the administration to reconsider its position. The proposal sparked widespread criticism, with many arguing that the additional tax could ultimately lead to higher costs for students, patients and their families.

Emphasising the government’s commitment to responsive governance, Shah said the administration would continue to place citizens’ interests at the heart of policymaking.

He noted that feedback from people across the country had been taken seriously and reaffirmed the government’s determination to build a fair and inclusive society while remaining open to revising policies that fail to gain public confidence.

The prime minister added that every government decision would continue to prioritise public welfare, stressing that authorities would not hesitate to amend or withdraw policies if they were found to be against the interests of the people.