Road‑use tax on locally produced goods is unlawful: FinMin

KATHMANDU: The Ministry of Finance (MoF) has clarified that levying a tax solely on the basis of using a road for transport is unlawful.

The ministry said the Constitution, the Intergovernmental Fiscal Arrangement Act, 2074 (2017), and the Local Government Operation Act, 2074, do not grant provinces or local levels the authority to tax the transport of locally produced goods between provinces or between local levels.

The MoF said some local levels have been imposing taxes and fees on goods transported through their routes, a practice that has negatively affected farmers and traders.

The ministry made a decision on December 9 and has requested that all provincial governments and local levels be informed. MoF spokesperson Tanka Prasad Panday said letters have already been sent in accordance with the decision.

(With inputs from RSS)