June 12: Minister of Finance Dr. Prakash Sharan Mahat has stated that the government has a clear policy to encourage the use of electric vehicles.

Answering questions raised in the Federal Parliament regarding the upcoming fiscal year's budget, Dr. Mahat mentioned that Nepal has relatively low taxes compared to other SAARC countries for the promotion of electric vehicles.

"The customs duty rates for electric vehicles in SAARC countries, including Nepal, vary significantly. In India, for example, the tax rate is 35% for un-assembled vehicles, 60% for vehicles priced up to 40,000 US dollars, and 100% for vehicles with a higher value.

In Pakistan, the tax rate is 50%, in Bangladesh, it is around 90% including all kinds of taxes.

He further explained that the arrangement for lower taxes and subsidies for electric vehicles aims to make them more affordable compared to vehicles running on diesel and petrol.

“The average total tax rates imposed on vehicles powered by petrol and diesel range from 251% to 358% including road construction tax while the average tax rates levied on electric vehicles range from 24.30% to 189.28%,” Dr Mahat added.