राइड सेयरिङमा साउन १ देखि कर, भाडा बढ्नेRide-sharing to be taxed from Shrawan 1, fares set to rise

The government will begin collecting 5 percent VAT on each ride-sharing transaction and 1 percent TDS from drivers starting Shrawan 1. The Inland Revenue Department says it has completed preparations to implement the measure.

The provision was introduced through the budget for the upcoming fiscal year. A total of 6 percent will be deposited into the government account as revenue, of which the VAT burden falls on the end consumer while the TDS is deducted in the driver's name.

According to department director Shiva Sharma, drivers must be registered under a personal PAN for TDS, though they do not need to register for VAT. The service-provider company will collect the amount from drivers and remit it to the tax office by the 25th of each month.

For example, if a passenger travels via Pathao and pays Rs 100, the driver must pay the company Rs 6 (excluding commission), Rs 5 as VAT and Rs 1 as TDS, and the company then deposits that amount with the tax office.

Ride-sharing in Nepal currently generates more than Rs 20 billion in annual transactions. The government expects to collect around Rs 1.20 billion in revenue from the 5 percent VAT and 1 percent TDS.

Fares are set to rise once the tax takes effect. According to Pathao Nepal Managing Director Yashu Thakali, taxi fares will increase by 5 percent, while a study is underway on how much motorcycle fares will rise. The company has urged drivers to update their PAN.