NAS-IT Submits Pre-Budget Recommendations: Calls For 10-Year Tax Holiday and Digital Infrastructure Boost
26th April 2026, Kathmandu
The Nepal Association for Software and IT Services Companies (NAS-IT) has officially submitted a comprehensive set of pre-budget recommendations for the upcoming fiscal year 2083/84.
NAS-IT Submits Pre-Budget Recommendations
Aiming to position information technology as a national priority, the association has proposed significant reforms in tax structures, investment incentives, job creation, and digital infrastructure.
The recommendations were presented during a program chaired by NAS-IT President Gaurav Pandey. During the session, the President of the Technology Journalists Forum (TJF), Purna Bhakta Duwal, emphasized the need for better coordination between the government and the private sector to ensure the real needs of the IT industry are reflected in national policy.
Key Recommendations for the FY 2083/84 Budget
NAS-IT highlighted that with the right policy interventions, Nepal’s IT sector—a high-potential, export-oriented industry—could become a major driver of foreign exchange earnings.
1. Tax Reforms and Financial Incentives
10-Year Tax Holiday: The association suggested a 1% corporate income tax on net profits for IT companies for the next 10 years to encourage reinvestment in innovation and R&D.
Export Subsidies: A request for an 8% export incentive for IT companies earning foreign currency.
Personal Income Tax Ceiling: To curb brain drain, NAS-IT proposed capping the maximum personal income tax rate for IT professionals at 25%.
VAT Clarity: Requests for clearer policies regarding VAT on IT exports and a streamlined process for VAT refunds to improve cash flow.
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2. Promoting Domestic Growth & “Digital Hub” Status
Domestic Preference: NAS-IT proposed that government IT contracts worth up to NPR 100 million be reserved exclusively for Nepalese companies.
Strategic Partnerships: For large-scale projects, a minimum of 30% of the work should be mandatory for local IT firms.
Double Taxation Avoidance (DTAA): The association urged the government to expand DTAA agreements with key markets like the USA, UK, and Australia to mitigate risks for Nepalese exporters.
3. Legal and Institutional Framework
National IT Promotion Board: A recommendation to establish a legal board to act as a single-window system for government-private sector coordination.
Labor Law Flexibility: Suggestions to align labor laws with the project-based nature of the IT industry and simplify the process for bringing in foreign experts.
Cybersecurity & AI: Calls for the amendment of the Electronic Transactions Act to address modern challenges in data privacy, AI ethics, and cybersecurity.
A Vision for the “IT Decade”
NAS-IT Vice President Dipen Chapagain, who presented the suggestions, noted that as global demand for AI, cloud services, and outsourcing grows, Nepal must leverage its competitive costs and skilled youth.
General Secretary Alisha Shrestha concluded the session by reiterating that these reforms could pave the way for an “IT Decade,” resulting in thousands of new jobs and a robust digital economy.
