Nepal Collects Significant Revenue from Digital Services
Author
Nepse trading
International tech giants such as Microsoft, Google, Meta, TikTok, Adobe, Netflix, Amazon, and Apple collectively conducted transactions worth nearly NPR 2.75 billion in Nepal during the fiscal year 2080/81 (2023/24). These companies paid over NPR 410 million in taxes to the government.
18 international companies registered under Nepal’s tax system recorded NPR 2.75 billion in transactions.
Taxes paid by these companies included:
NPR 358.5 million as Value Added Tax (VAT)
NPR 58.1 million as Digital Services Tax (DST)
A single U.S.-based company recorded the highest transaction of NPR 1.31 billion, paying the largest share of taxes.
Major Companies Involved:
Some of the prominent tech companies registered under Nepal's tax system include Google, Meta, Microsoft, TikTok, Amazon, Netflix, Apple, Adobe, and others. These companies provide digital services like advertising, cloud services, OTT platforms, software, and more.
Tax System Update:
From the current fiscal year 2081/82 (2024/25), companies with annual transactions exceeding NPR 30 lakh (raised from NPR 20 lakh) are required to pay Digital Services Tax and VAT.
Economic Contribution:
From July to December 2024 (five months), 19 foreign companies reported NPR 490 million in transactions.
During this period, NPR 64 million in VAT was paid.
Previous Fiscal Data:
In fiscal year 2079/80 (2022/23), after implementing the Digital Services Tax, eight companies recorded NPR 700 million in transactions in just five months, contributing NPR 109.4 million in taxes.
Challenges and Opportunities:
According to officials:
There is a lack of comparative studies with other South Asian nations.
Although Nepal's tax laws align with Malaysia's, the smaller size of Nepal's digital economy makes direct comparisons difficult.
As the digital economy grows, this sector is expected to become a significant revenue source for the government in the future.
A revenue advisory committee will analyze the potential of digital service taxes further.
Plans are underway to introduce recognition programs for international companies contributing the most in taxes.
While the contribution from digital services to Nepal’s revenue remains modest at present, the growing adoption of digital platforms and services is expected to make this sector a vital economic contributor in the years ahead.
