Revenue Advisory Committee Formed To Suggest On Next Year’s Tax Policy

Kathmandu, Feb 27: The process for formulating the budget for the upcoming fiscal year 2026/27 has been formally proceeded ahead.

A Revenue Advisory Committee was formed by the ministerial decision on February 11 with the objective of collecting concrete suggestions on revenue policy, tax structure, customs rates, revenue administration, and macroeconomic reforms before the budget formulation.

The Finance Ministry Spokesperson Tanka Prasad Pandey said that a committee has been formed under the coordination of the Secretary (Revenue) of the Ministry and the committee has started its work.

The Committee includes representatives from the government, the central bank, academic sector, and private sector institutions. The Committee members include the Head of the Central Department of Economics at Tribhuvan University or the designated senior professor, the Joint Secretary of the Ministry of Industry, Commerce and Supplies, the Executive

Director of Nepal Rastra Bank, and two experts (an economist and a tax expert) appointed by the Ministry of Finance.

Similarly, there is representation in the Committee also from the umbrella organisations of the private sector. The Committee includes the presidents or designated senior officials of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI), Nepal Economic Association, the Confederation of Nepalese Industries (CNI), the Nepal Chamber of Commerce, Nepal Federation of Industries and Trade, and the Federation of Nepal Small and Cottage Industries as members.

The Joint Secretary of the Revenue Management Division of the Ministry of Finance has been designated as Member-Secretary of the Committee.

Spokesperson Pandey said that the Revenue Advisory Committee was given a mandate to provide suggestions on policy and legal reforms related to income tax, value added tax (VAT), excise duty, education service fee, digital service tax, taxes applicable to e-commerce, and other domestic taxes according to the financial law.

He stated that the committee has also been given the responsibility to recommend on the revision of tax rates, simplification of processes, improvement of the tax system, as well as necessary improvements in revenue administration and organisational structure.

Similarly, the Committee will also present suggestions for policy and legal reforms regarding industrial promotion and protection, import–export services, service trade, investment promotion, supply management, and tax and non-tax incentives.

The Committee's scope of work also includes reviewing customs duties, measures for the protection of domestic production, improving the valuation system, trade facilitation, border management and customs administration reforms.

It shall study and provide suggestions on issues related to revenue leakage control, curbing smuggling of goods, foreign exchange regulation, economic crime control, investigation of money laundering, and the necessary legal and organisational reforms for these purposes.

Revenue and policy reforms in the fields of agriculture, energy, tourism, civil aviation and natural resource management are also included in the Committee's scope of work.

The Committee would recommend about the problems seen in banks, financial institutions, remittance, share market and real estate sectors and also recommend their solution, including issues related with revenue mobilization.

It has got the mandate to give suggestion in order to identify new areas of non-tax revenue, rate determination and revision, solutions to problems of tax duplication, tax between federation-province and local levels and reforms on inter-government revenue management and revenue disbursement.

The Committee would give suggestions on the issues related to economic development making comparative analysis about international, regional and national economy. According to the Finance Ministry, nine different thematic sub-committees have also been formed for Committee's effective work.

The Inland Revenue Sub-Committee shall work on the issues including inland tax including income tax, VAT, excise duty and digital tax while Customs Sub-Committee would prepare suggestions focusing on customs tax, assessment system, trade facilitation and border management.

Likewise, Revenue Leakage Control and Investigation Sub-Committee would work on analyzing leakage trend, measures to control it, foreign exchange and financial crime control while Industry, Commerce, Investment and Export Promotion Sub-Committee would recommend the issues like industrial protection, trade policy-level reforms.

Similarly, Agriculture, Energy and Tourism Sector Sub-Committee would study about reforms related to commercialization of agriculture, power production, tourism promotion and natural resources management.

The Bank, Financial Institution, Insurance, Cooperative and Share Market Sub-Committee would provide suggestions about relations between problems of financial sector and revenue mobilization while the Non-Tax and Inter-Government Revenue Management Sub-Committee would work on sources and rate of non-tax revenue and solution to tax duplication in federal structure.

The Macroeconomic Sub-Committee would analyze economic indicators, revenue potentials and projection while Anti-Money Laundering and Investigation Sub-Committee would analyze risk along with a strategy to exit from 'grey list' of FATF recommend and measures of improvement.

Suggestions have been sought from concerned government bodies, representative organisations of the private sector, academic sector, stakeholders and general people regarding tax policy to be adopted through budget of coming fiscal year, mentioned the Finance Ministry.

The Sub-Committees would present their reports before the main committee within April 13. The main committee would submit the final report within mid-May.