Govt mulls reviewing VAT on electricity tariffs amid public criticism
Summary
The government is preparing to revoke VAT on electricity tariffs after public criticism over higher costs for households, industries and businesses. Energy Minister Biraj Bhakta Shrestha and Finance Minister Swarnim Wagle have discussed whether to abolish the tax entirely or raise the exemption threshold.
Key Points
- The government is considering removing VAT on electricity tariffs just two months after introducing it in the current fiscal year.
- The tax applies 5 percent VAT on household consumption above 50 units and 13 percent on industrial and commercial users.
- Critics say the VAT has increased costs for consumers and businesses and conflicts with the government's push for electric vehicles and induction stoves.
- Officials have not yet decided whether to abolish the tax completely or raise the exemption threshold.
