Speaking at a post-budget interaction program organized by the Association of Economic Journalists of Nepal (NAFIJ), Dr. Wagle clarified that the upcoming 5% value-added tax (VAT) will apply to consumers who use more than 50 units of electricity per month. However, he emphasized that steps are being taken to offset this cost for the public.
"5 percent tax will be levied on electricity consumption, however, we are recommending that the Electricity Regulatory Commission reduce base electricity tariffs so that the end consumers are least affected," Minister Wagle said.
The Finance Minister noted that the government has already reached out to the Electricity Regulatory Commission to explore price adjustment mechanisms. Highlighting the seasonal surplus of electricity, he suggested that even minor tariff cuts could provide meaningful relief.
"There is a power surplus during the rainy season. Even if we can reduce the price by 50 paise per unit, it will benefit the consumers," Dr. Wagle added.
Defending the policy, Minister Wagle explained that the energy sector—which has seen billions of rupees in investment over recent years—can no longer remain entirely outside the formal tax net.
He reassured the public that while bringing the sector into the tax framework is necessary for the economy, finding alternative price adjustment strategies remains a priority to ensure ordinary citizens do not bear the brunt of the tax.
