Nepal ICT Budget 2082 Offers Relief But Tech Startups Seek More
30th May 2025, Kathmandu
The Government of Nepal has announced major tax reforms aimed at promoting the growth of the information technology (IT) sector.
Presenting the national budget for the fiscal year 2082/83 (2025/26) in a joint session of the Federal Parliament, Finance Minister Bishnu Prasad Paudel revealed that the government will provide 75% income tax exemption on IT service exports and a five-year tax holiday for startups with an annual turnover of up to NPR 100 million.
Nepal ICT Budget 2082 Offers
“Nepal’s 2082/83 Budget Offers 75% Income Tax Exemption on IT Exports – But Is It Enough for Small IT Entrepreneurs? Government Announces Tax Incentives for IT Startups and Service Exports”
This initiative is part of a broader strategy to accelerate digital transformation in Nepal, boost foreign revenue through IT exports, and empower emerging tech entrepreneurs across the country.
“Income generated through IT service exports will be granted a 75% tax exemption. Individuals residing in Nepal who export IT-based services to foreign countries will now pay only 5% income tax,” said Finance Minister Paudel during his speech.
In addition, the budget provides tax and duty exemptions not only to IT-based industries but also to startups and hospitality businesses, indicating a focus on economic revitalization through innovation and technology.
Chiranjibi Adhikari: Budget Lacks Practical Support for Small-Scale IT Entrepreneurs
Despite these promising announcements, industry experts believe the budget falls short of addressing the ground realities of Nepal’s IT ecosystem, particularly for small startups and early-stage entrepreneurs.
Chiranjibi Adhikari, a renowned cybersecurity policy expert and CEO of One Cover Pvt. Ltd., acknowledged the government’s positive intent but expressed concerns about the gaps in practical implementation.
“The current income tax exemption is not enough,” says Adhikari. “Small-scale IT startups are still burdened by other taxes such as 13% VAT, 15% TDS, high office rent, and payroll taxes, which make it difficult to launch and sustain IT ventures.”
According to Adhikari, the IT sector should be prioritized on par with critical sectors like education and healthcare. He emphasized the need for VAT and TDS exemptions on materials and services used during service delivery and office establishment.
“Only then will small entrepreneurs be truly encouraged, and Nepal’s vision of a digital nation become achievable,” he adds.
Key Takeaways: Budget 2082/83 and IT Sector Reforms
75% income tax exemption on IT service exports.
Individuals residing in Nepal who provide IT services internationally are eligible for a 5% income tax rate.
Five-year income tax holiday for startups with annual turnover up to NPR 100 million.
Additional tax exemptions planned for hotels and IT-based industries.
Industry leaders demand further policy clarity and relief from VAT, TDS, and operational taxes.
The Road Ahead for Nepal’s Digital Economy
The budget marks an important milestone in the government’s plan to position Nepal as an IT hub in South Asia. However, to fully realize this vision, policies must be inclusive and consider the financial realities of small-scale businesses, not just large corporations.
Without addressing issues such as operational tax burdens, regulatory hurdles, and infrastructure gaps, the proposed incentives may fall short of their intended impact.
As Nepal moves forward with its Digital Nepal Framework, it remains to be seen how the government will respond to feedback from IT stakeholders and refine its approach to create a truly enabling environment for innovation and entrepreneurship.
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