2nd June 2025, Kathmandu
The Government of Nepal has unveiled its national budget for the fiscal year 2082/83, a move lauded by the Confederation of Nepalese Industries (CNI) as “balanced and forward-looking.”
CNI Welcomes Nepal’s 2082
The budget aims to tackle current economic challenges and stimulate private investment, with a strong focus on industrial growth and innovation.
CNI, in its initial assessment, has expressed optimism about the budget’s potential to drive economic recovery, highlighting several key provisions designed to foster a more business-friendly environment.
Boosting Private Investment and Industrialization
A central theme of the new budget is the prioritization of private investment and industrialization. The government has introduced several policies and legal reforms to attract capital, including:
Rent Exemptions: Industries setting up in special and industrial zones will benefit from rent exemptions for their first three years of operation.
Reduced SEZ Rental Rates: A significant reduction in rental rates within Special Economic Zones (SEZs) from Rs. 20 to Rs. 5 per square meter is expected to lower operational costs for businesses.
Export-Oriented Incentives: Industries exporting over 30% of their products will now receive SEZ-level facilities, even if located outside designated zones. This measure is anticipated to significantly boost Nepal’s manufacturing and export capabilities.
Support for Startups and Innovation
Addressing a long-standing demand from CNI, the budget demonstrates a commitment to nurturing entrepreneurship and tech-driven businesses:
Incubation Centers: The establishment of incubation centers through collaborations between the government, universities, and the private sector aims to provide crucial support for emerging businesses.
Tax Exemptions: Startups with annual transactions up to Rs. 100 million will enjoy a five-year income tax exemption.
IT Export Incentives: Individuals exporting IT services from Nepal will be subject to a final tax of only 5%, a move designed to encourage the growth of the IT sector.
Expanding Global Business Footprint
A visionary provision in the budget allows Nepalese businesses to open sales branches or processing factories abroad, with the ability to invest up to 25% of their export earnings in foreign countries. CNI has hailed this as a progressive step towards expanding Nepal’s global business presence.
Infrastructure and Construction Push
The budget outlines plans to stimulate the construction and cement industries through:
Road Development: Proposed use of RCC pavement for roads.
Railway Studies: Detailed studies for standard-gauge electric railways.
Urban Development: Public-private partnerships to drive urban development initiatives.
Tax and Regulatory Reforms
CNI welcomed the government’s decision to review VAT, income tax, and excise laws. The proposal to study the implementation of multi-rate VAT is particularly significant, with CNI urging for its timely prioritization and practical application. Other notable reforms include:
VAT exemption for digital payment clearinghouse services.
Elimination of advance income tax at customs points for food and dairy items.
Removal of minimum tax on non-operating businesses.
Abolition of the Rs. 300,000 bank guarantee requirement for EXIM codes.
Boosting Productive Sectors and Access to Credit
The budget ensures working capital loans for productive sectors such as manufacturing, tourism, housing, and construction through a simplified process, a provision CNI anticipates will be implemented via the upcoming monetary policy.
Environmental and Forest Use Reforms
Measures aimed at accelerating project completion and promoting sustainable practices include:
Allowing the use of public forest land for infrastructure projects like hill stations, hotels, and resorts.
Removal of the re-measurement requirement for cutting approved trees.
Reduced deposit requirement (1%) into the Forest Development Fund for tree-growing expenses.
Faster and easier environmental impact assessment (EIA) process.
Digital Transformation and Data Centers
To support Nepal’s digital transformation and attract foreign investment in the IT sector, the budget proposes public-private partnerships for data center development, offering companies land, uninterrupted electricity, and security.
Green Development and Capital Market Expansion
In line with green taxonomy principles, the budget includes:
Legal provisions for provident and investment funds to invest in private equity and venture capital.
Policies for green and sustainable development bonds.
Launch of the secondary market for government bonds.
Attracting Global Talent
To position Nepal as a favorable hub for remote work and tech talent, the government will offer:
Free residential visas for startup investors and experts.
Digital nomad visas for remote workers employed by foreign companies.
Hydropower and Renewable Energy Initiatives
The budget supports private investment in hydropower generation, transmission, and distribution, allowing companies to sell electricity from solar or wind batteries and offering discounted tariffs for industrial electricity usage during off-peak hours.
Trade Facilitation and Customs Modernization
CNI commended reforms in customs and trade facilitation, including the elimination of outdated reference books for customs valuation, the development of an automated global pricing database, and the introduction of paperless, contactless, and faceless tax administration. Major customs points are also slated for upgrades with integrated check-posts.
Long-Term Urban and Housing Development
The government plans to construct 100,000 housing units in major cities for civil servants, security personnel, and teachers, with subsidized loans and installment plans. Revisions to public procurement laws aim for timely and cost-effective project delivery, with officials being held accountable for delays causing cost overruns.
Areas for Further Attention
Despite the positive reception, CNI highlighted some areas needing further government attention, including the absence of a comprehensive industrial development strategy, incomplete implementation of quality control and labeling standards, and a lack of follow-through on specialized laws for industries.
Implementation: The Key to Success
CNI underscored that while the budget appears promising on paper, weak implementation has been a recurring issue. The confederation urged the government to ensure clear guidelines and accountability mechanisms to achieve the targeted 6% economic growth.
To aid this, CNI announced it would continue its “Budget Watch” initiative to monitor implementation and hold regular discussions with stakeholders.
The Confederation of Nepalese Industries concludes that the 2082/83 budget marks a strong step toward economic recovery and industrial growth. However, its true impact will ultimately be determined by effective execution and robust collaboration between the public and private sectors, paving the way for Nepal’s sustainable economic growth.
For more: CNI Welcomes Nepal’s 2082