Taxation in Kathmandu: From Soft Drinks to Hotels - A Breakdown of Rates

The Kathmandu Metropolitan City (KMC) recently presented the Economic Bill, 2080, which outlines the tax rates for various businesses within the city for the upcoming fiscal year 2080-2081.

The commercial tax rates have been determined based on the nature of different businesses and their investment status. According to the Economic Bill, businesses registered under the soft drinks manufacturing industry will be subject to a tax of Rs. 50,000.

Additionally, there will be an annual fee of Rs. 2,000 for the renovation of domestic soft drink production industries. Distillery industries will be required to pay Rs. 50,000, export-oriented businesses will face a tax of Rs. 5,000, and import-oriented businesses will have to pay Rs. 10,000.

Film production companies will be taxed Rs. 15,000, while distribution companies will incur a tax of Rs. 5,000. The mineral water industry will face a tax of Rs. 5,000, and ice cream industries with a power capacity above three kilowatts will be taxed Rs. 10,000, whereas domestic ice cream industries with a power capacity up to three kilowatts will be taxed Rs. 2,000.

Branded biscuits, bread rolls, and cake industries will face a tax of Rs. 10,000, and smaller home-based industries in the same sector will be taxed Rs. 2,000. The dairy industry will be subject to a tax of Rs. 10,000, while Kutani-Pisani mills will be taxed Rs. 5,000. Branded shoes and slippers manufacturing industries will face a tax of Rs. 12,000, and bag, belt, and purse manufacturing industries will be taxed Rs. 5,000.

Food industries with a power capacity above five kilowatts will be taxed Rs. 10,000, whereas smaller food industries will face a tax of Rs. 5,000. Carpet, garment, pashmina, and plastic industries will be taxed Rs. 10,000. Copy, book, and printing industries will face taxes ranging from Rs. 2,000 to Rs. 12,000 based on their capacity. Underground water processing industries will incur a tax of Rs. 50,000, and the bottled and jar water industry will face a tax of Rs. 7,000.

Sleeping mattress and cushion-making industries will be taxed Rs. 5,000, while herbal industries will face a tax of Rs. 2,000. Industrial businesses involved in the construction and operation of road bridges, ropeways, railways, tunnels, flybridges, and industrial, commercial, and housing complexes will face a tax of Rs. 25,000.

Grocery stores will be taxed Rs. 2,000, wholesale grocery stores will incur a tax of Rs. 5,000, wholesale food sellers will be taxed Rs. 10,000, and food retail sales will face a tax of Rs. 3,000. Beekeeping businesses will be subject to a tax of Rs. 2,000, while selling chicken chicks will incur a tax of Rs. 3,000.

Retail shops selling fruits, juices, and vegetables will be taxed Rs. 1,000, wholesale fruit and vegetable shops will face a tax of Rs. 2,000, and fruit and plant sellers (nurseries) will be taxed Rs. 2,000. Retailers of fish, meat, and eggs will be taxed Rs. 2,500, and wholesalers will face a tax of Rs. 6,000. Businesses involved in selling processed meat products will be subject to a tax of Rs. 5,000. Vegetable farming, animal husbandry, and other agricultural activities will be taxed Rs. 2,000, wholesale shops selling pet shop items will face a tax of Rs. 7,000, and retail shops will be taxed Rs. 3,000.

Dog breeding centers will be taxed Rs. 5,000, modern animal slaughterhouses will incur a tax of Rs. 2,000, and shops selling vegetable seeds will face a tax of Rs. 2,000.

In the hotel, tourism, and entertainment sectors, taxes will be as follows: five-star hotels - Rs. 1 lakh, four-star hotels - Rs. 80,000, three-star hotels - Rs. 60,000, two-star hotels - Rs. 40,000, and one-star hotels - Rs. 20,000.

Film exhibition houses, ordinary hotels, lodges, guesthouses, homestays with a capacity of more than 50 people, restaurants, bars (excluding dance venues), travel agencies, and trekking agencies will face a tax of Rs. 10,000.

Massage parlors, spas, jacuzzis, saunas, and swimming pools will be taxed Rs. 10,000. Contact offices of tourist sports activities (such as golf courses, rafting, safaris, horse riding, skiing, gliding, water rafting, pony trekking, paragliding, polo, bungee jumping, cable cars, resorts, and hotels) will face a tax ranging from Rs. 2,000 to Rs. 30,000.

Foreign airline service providers will be taxed Rs. 50,000, while domestic airline services will incur a tax of Rs. 25,000. Aircraft leasing companies, discos, night clubs, and foreign employment liaison businesses will face a tax of Rs. 25,000.

Casinos will be taxed Rs. 300,000, and mini casinos will face a tax of Rs. 25,000. Trekking goods shops, businesses providing entertainment services, tanka shops, dance training centers, businesses offering music-related services, and tattoo parlors will all face a tax of Rs. 5,000.

Hostels accommodating up to 50 people will be taxed Rs. 3,000, while hostels with more than 50 people will face a tax of Rs. 5,000. Make-up studios will be taxed Rs. 30,000. Fun parks with an area of up to five ropanies will face a tax of Rs. 10,000, fun parks with an area of up to ten ropanies will be taxed Rs. 20,000, and fun parks with an area exceeding ten ropanies will incur a tax of Rs. 30,000.

In the communication sector, television broadcasting companies will face a tax of Rs. 5,000, FM stations will be taxed Rs. 1,000, online service businesses will incur a tax of Rs. 2,000, online news portals will face a tax of Rs. 500, national newspapers will be taxed Rs. 2,000, local newspapers will incur a tax of Rs. 1,000, and cyber cafes will face a tax of Rs. 2,000.

KMC has also introduced additional taxation for banks and financial institutions (BFIs) operating within its jurisdiction.

READ MORE to find out: Kathmandu Metropolitan Imposes New Taxation on BFIs