The Nepal government has hiked taxes on two-wheelers automobile in its revised budget presented recently where it proposed an increase in excise duty and road development tax, raising the likelihood of decreased sales in the coming festive seasons. The revised budget is presented for the remaining period of the fiscal year 2021-22.

The sale of two-wheeler vehicles usually surges up to 60 percent during Dashain and Tihar, two famous festivals in the country. However, the recent tax hike will likely push the prices of vehicles by $127 to $424 which could dampen the discounts usually offered by dealers, according to a report in The Kathmandu Post. 

In the revised budget, the government also offered a 50 percent waiver on the taxes on automobile parts used for the two assembling industries--a move aimed at boosting assembly lines in the country. 

“The higher waiver will allow domestic assemblers to lower their prices and become more competitive with imported bikes,” Krishna Prasad Dulal, the president of Nepal Automobile Dealers’ Association (NADA), was quoted as saying by The Kathmandu Post. 

The government has been eyeing to push dealers to open their own assembly lines by offering incentives. The increased domestic production and incentive will help to lower the import which has gone up significantly in recent years. 

In the fiscal year 2020-21, the import bill of two-wheelers stood around $281 million, recording a whopping increase of 76 percent in comparison to the year before when it was $169 million. 
  
(SAM)