The sweeping legislative package aims to cut red tape, align national laws with the federal structure of the Constitution, and alleviate administrative bottlenecks for investors and entrepreneurs.

Dismantling the Revenue Investigation Department's Monopoly

The most consequential aspect of the bill is the complete repeal of the Revenue Leakage (Investigation and Control) Act, 2052 BS and its accompanying Regulations, 2070. For years, the business community has decried jurisdictional overlaps and harassment arising from concurrent oversight by three separate bodies: the Department of Revenue Investigation (DRI), the Inland Revenue Department (IRD), and the Department of Customs.

Under the new framework, the DRI's centralized authority will be dismantled in favor of specialized, domain-specific enforcement:

• Tax Offenses: Investigation into income tax, VAT, and excise duty evasion will be handled directly by the Inland Revenue Department.

• Smuggling & Customs Evasion: The Department of Customs will assume full jurisdiction.

• Foreign Exchange Misappropriation: Dedicated investigating officers appointed by the Nepal Rastra Bank (NRB) will oversee these cases.

This shift establishes a "one-door research system," reducing administrative overhead and saving businesses from navigating multiple agencies for a single file.

Mandatory GPS and Tech Upgrades for Commercial Cargo

To combat transit fraud, the government intends to inject technology into the logistics sector by introducing Section 28 (a) to the Value Added Tax (VAT) Act, 2052.

• The Rule: All commercial transport vehicles—including trucks, containers, and tankers registered or operating in Nepal—must integrate with the Online Transport Vehicle Monitoring System (VCTS).

• The Tech: Vehicles must be equipped with active GPS/VCTS tracking devices.

• The Penalty: Violations will attract a Rs. 50,000 fine for the first offense, escalating up to Rs. 100,000 for subsequent infractions.

Stringent Crackdown on Non-Tax Revenue Defaulters

For the first time, the state has legally codified the definition of "non-tax revenue" via an amendment to the Income Tax Act, 2058 BS. This encompasses service charges, royalties, dividends, penalties, fees, and principal refunds owed to the state.

The Director General of the IRD will receive expanded powers to investigate non-tax delinquencies. To deter concealment, the bill introduces a harsh 100% penalty on hidden non-tax liabilities, a measure projected to heavily bolster the state treasury.

Boosting Post-Clearance Audits at Customs

A comprehensive amendment to the Customs Act, 2082 will empower customs officials to police smuggling outside designated customs zones.

If discrepancies are suspected on cargo that has already cleared traditional inspections, the department holds the authority to deploy subordinate officers for secondary field checks and retroactive audits, sealing loopholes often exploited by smugglers.

Repealing 6 Obsolete and Irrelevant Acts

The bill slashes legal deadweight by entirely repealing several decades-old Acts that contradict modern federalism or have been rendered redundant by newer legislation:

(Note: Two additional minor regulatory acts comprise the remaining half-dozen repealed).

"We are trying to end duplication by removing legal complexities. This step has been taken to develop a transparent system based on technology instead of the old Revenue Leakage Act, which treats businessmen like criminals."

— Dr. Swarnim Wagle, Finance Minister

Economic Outlook

According to the bill's financial notes, these sweeping reforms will not impose any additional financial liability on the Government of Nepal. In fact, utilizing existing institutional frameworks (like the IRD and Customs Department) is expected to optimize operational costs. While the private sector welcomes the move toward a simplified regulatory landscape, the ultimate success of the bill hinges on how seamlessly these distinct departments coordinate post-transition.