www . nepalitimes . com #1165 9 - 15 June 2023 12 pages Rs 50 I f there is one thing Nepal’s annual budget is consistent about, it is being inconsistent. In 2020, the government reduced or removed most taxes on electric vehicles. The next government re-imposed taxes for electric SUVs while cheaper vehicles were taxed less. This year Finance Minister Prakash Mahat raised taxes on smaller EVs and electric vans while inexplicably reducing the tax on luxury SUVs. This discourages car buyers from switching to clean energy at a time when Nepal is set to have year-round electricity surplus. The decision also undermines Nepal's own decarbonisation commitments. More diesel and petrol vehicles also means worse air pollution, affecting public health. Customs and excise tax on electric cars between 50-100KW has increased by 5% and 10%, meaning they now have to pay 15% customs tax and 10% excise duty, the latter of which was not applicable before. Vehicles in this bracket include electric public utility vans, battery-operated microbuses and smaller e-cars which were gaining popularity across Nepal. “This is a blatant disregard for the country’s environment policies,” says environmentalist Bhushan Tuladhar. “To add insult to injury, they have slashed the tax on bigger vehicles. This is suspicious, especially as it does nothing for government revenue even if that was the reasoning.” Customs and excise for 100- 200KW EVs is down from 30% to 20%. Similarly, customs duty for 200-300KW EVs has gone down from 45% to 40% while excise remains the same at 45%. Customs for EVs in the 300KW or above bracket is set at 60-80% against 60% previously, with excise maintained at 60%. EVs with 100KW motors will now be at least 20% more expensive. ‘It is deliberate sabotage,’ wrote atmospheric scientist Arnico Panday, now with the RSP, the fourth largest party in Parliament, on Twitter. ‘The present leadership does not care about clean air, health, people, domestic energy, new technology or the country’s future, & probably got bribed by dealers of polluting vehicles in segments with popular EVs.’ The government has changed the tax rates for EVs five times in two years, disrupting the market and raising suspicions that the rates are adjusted by powerful lobbies from among car importers. Especially egregious is the increase in the tax of electric micro-buses which had started becoming a popular form of public transport. Nepal’s generation capacity is expected to reach 4,500MW by 2024 while domestic demand will only grow to 2,000MW (page 10-11). Tax incentives for electric public transport would reduce Nepal’s growing petroleum import bill, and improve air quality. “Our policies contradict our climate targets, but more importantly they make no sense even from an economic point of view,” says climate activist Shilshila Acharya. At COP26 in 2021 in Glasgow, Nepal’s prime minister committed to achieving net zero by 2045 and increasing the sales of private electric vehicles to 25% by 2025 and 90% by 2030. Electric public transport would be 20% by 2025 and 60% by 2030. The biggest letdown are the disincentives to switch to electric buses. MPs on Wednesday accused the government of dragging its feet on letting Sajha Yatayat put up charging stations for its 40 new electric buses. Reducing taxes on e-microbuses will have a multiplier effect on the economy, benefiting small time entrepreneurs. The government could use a part of the Rs4 billion already collected as pollution tax to immediately invest in 200 electric buses by subsidising the capital cost for battery-powered buses. Says Tuladhar: "If you must tax something, increase the pollution tax, which is less than 1% of all the taxes we pay, and then divert the fund for clean alternatives.” Sonia Awale Hyundai IONIQ 5 Rs 11,696,000 Rs 10,296,000 MG ZS EV Delux Rs 5,249,000 Rs 6,036,350* Nissan Leaf Rs 6,499,000 Rs 5,199,200* Tesla Model 3 Rs 15,500,000 Rs 13,500,000 Tata Nexon EV Rs 4,649,000 Rs 5,346,350* Before Budget | After Budget | *Estimated KIA Niro EV Rs 6,990,000 Rs 5,592,000* thee GO EC 36 Rs 4,141,000* Rs 4,595,00020 YEARS AGO THIS WEEK Most popular on Twitter Most commented QUOTE TWEETSNationDIARIES 34 DIASPORASTRIKING ROOTSOUR PICK MISS MOTI-VATION KRIPA JOSHI g]kfn ;/sf/ lj1fkg af]8{Next >