Private Motorcycles in Nepal Banned from Ride Sharing; Government Introduces 5% Transaction Tax

The government has announced that motorcycles and scooters with red number plates, which signify private use, will no longer be allowed to operate as ride sharing vehicles. According to the new Economic Act, all two wheelers used for ride sharing must now be officially registered as public transport vehicles. Under the Transport Act of 1993 (2049 BS), vehicles registered for public rental or commercial transport are required to carry black number plates. Consequently, all private two wheelers currently providing ride sharing services must switch their registration to black plates.

Along with the change in registration, the government has introduced new tax regulations for these commercial two wheelers. Operators will now be required to pay an annual income tax, which has initially been set at 3,000 Nepali Rupees.

Furthermore, the government is expanding its tax reach on the ride sharing industry by targeting individual rides. Moving forward, a 5% transaction tax will be applied to every single ride sharing booking made through these platforms.