National Tax Day: "The Essence of Tax System, the Foundation of Nepal"

Nepal observes National Tax Day on Mangsir 1 every year to commemorate the introduction of the Value Added Tax (VAT) in the country. This year, the theme is “The Essence of Tax System, the Foundation of Nepal.”

The Government of Nepal manages key tax categories under the Inland Revenue Department (IRD), including income tax, VAT, and excise duty, which form the backbone of internal revenue collection.

In the fiscal year 2080/81, Nepal collected a total revenue of NPR 1.058 trillion, out of which the IRD contributed NPR 533 billion, accounting for approximately 78.65% of the total revenue. This highlights the critical role of internal tax administration in the nation’s economy.

On the occasion, Prime Minister K.P. Sharma Oli emphasized the importance of establishing a broad and sustainable tax base through a transparent and investment-friendly tax system. He underscored that an effective tax framework is essential to achieve the vision of a "Happy Nepali, Prosperous Nepal."

Finance Minister Bishnu Poudel highlighted the need for expanding the tax base, increasing participation, reducing collection costs, and curbing tax evasion. He stressed that further reforms are necessary to address existing challenges and make tax administration more efficient.

The revenue collection figures underscore the significant contribution of Nepal’s internal tax system to economic development. However, challenges like expanding the tax net and controlling tax evasion remain pressing issues. Strengthening the tax system with transparency, sustainability, and technological innovation could further accelerate economic progress.

National Tax Day serves as a platform to enhance public awareness of the importance of taxes and encourages collective efforts to make the system more effective and equitable.