Budget 2026/27: Committee To Be Formed To Assess Feasibility Of Multi-Rate System In VAT

Kathmandu, May 29: The government plans to create a high-level advisory committee tasked with evaluating the applicability of a multi-rate system in VAT and provide recommendations accordingly.

Presenting the budget for the fiscal year 2026/27 at the joint session of the Federal Parliament today, Finance Minister Dr Swarnim Wagle announced significant reforms in the tax system, sharing that the approach of transforming tax administration from a punitive entity to a partner in development.

Furthermore, he noted that to foster a tax-payer-friendly environment, a special discount and concession scheme has been introduced to address long-standing tax disputes. In instances of tax disputes pending before the courts or other judicial entities involving the government or the taxpayer, if an additional one percent is added to the specified tax amount and submitted within the designated timeframe, the case will be dismissed, and all fees, fines, additional penalties, late fees, and interest will be waived.

Referring to the reduction of the number of federal ministries from 22 to 18, Dr Wagle said the resources saved from the reduction of such ministries, departments, offices, and positions will be allocated to improve administrative efficiency.

Under this new arrangement, 31 agencies will be dissolved, six agencies will be merged, six agencies will be relocated, and 18 agencies will undergo restructuring. With the objective of making the bureaucracy more efficient and accountable, the government has committed to continuously enhancing the benefits for civil, military, police, and teaching services in a dignified manner. According to the finance minister, it is estimated that this move will save Rs 20 billion.

The budget also prioritizes the control of general expenditure as a significant focus.