Experts Suggest Making Income Up To NRs 12 Lakh Tax-Free In Nepal

Experts and stakeholders have suggested that the Government of Nepal should raise the income tax exemption limit to NRs 12 lakh per year. They argue that this move would give relief to low and middle-income families who are facing growing pressure from rising living costs.

The suggestion was made to the Ministry of Finance as part of broader discussions on improving Nepal’s tax system. According to experts, the current income tax structure needs to be reviewed so that working people are not heavily burdened at a time when daily expenses are increasing.

At present, many Nepali households are spending more on food, rent, education, transport, healthcare, and other basic needs. Experts believe that increasing the tax-free income limit would leave more money in people’s hands and help them manage their household expenses better.

They also said that Nepal’s tax policy should not only focus on collecting revenue but also support economic activity. A fairer tax structure, they argue, can help increase public confidence, encourage spending, and create a more balanced economy.

Along with tax relief for individuals, stakeholders also suggested that the government should revise tax rates in a way that encourages private sector investment. They said lower tax pressure and clearer rules could help businesses grow, invest more, and create employment opportunities.

The proposal comes at a time when many citizens are demanding stronger government action to deal with inflation and financial stress. If the government accepts the recommendation, people earning up to NRs 12 lakh annually would not have to pay income tax on that amount.

However, the final decision will depend on the Ministry of Finance and the government’s upcoming fiscal policy. Any change in the tax exemption limit would likely be announced through the national budget or related tax policy reforms.

Experts say such a step could be important for both public relief and long-term economic growth. For now, the proposal has sparked discussion on whether Nepal’s tax system should be made more people-friendly during difficult economic times.