Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has clarified that the introduction of a luxury tax on gold and silver transactions is a strategic move to support Nepal’s removal from the Financial Action Task Force (FATF) grey list. He made the statement while addressing queries during deliberations on the Appropriation Bill 2082 BS in the National Assembly.
Minister Paudel stated that a two percent luxury tax currently applies to gold transactions exceeding Rs. 1 million, but from the upcoming fiscal year 2025/26, the threshold has been removed to ensure transparency in high-value precious metal trades. He emphasized that the measure is essential for strengthening the country’s financial compliance and integrity. Discussions are ongoing with gold and silver traders who have expressed concerns over the tax provision, and the minister expressed optimism about reaching a constructive resolution.
Highlighting the broader fiscal plan, Minister Paudel said the Rs. 1.964 trillion budget announced last month is both realistic and implementable. He noted that the budget gives due focus to internal revenue generation, sustainable borrowing practices, and productive expenditure. The policy framework ensures that borrowed funds are directed toward capital formation rather than recurrent spending.
Minister Paudel also addressed criticisms regarding undue political influence in the budget formulation process. He asserted that the budget was prepared in a consultative manner, with meaningful involvement from lawmakers. Key priorities include accelerating national pride projects, promoting entrepreneurship, enhancing employment and social security, and increasing public participation in economic activities. The National Assembly later endorsed a proposal presented by the minister for further deliberation on the Finance Bill 2082 and the Bill to Raise National Debt 2082.
