NAS-IT welcomes measures to strengthen IT sector in budget for FY 2026/27
KATHMANDU: Nepal’s apex IT industry body, Nepal Association for Software and IT Services Companies (NAS-IT), has welcomed measures in the government’s budget for fiscal year 2026/27. The measures aim to strengthen the information technology (IT) sector and boost its role in the country’s economic transformation, the association said.
In a press statement, NAS-IT highlighted tax concessions on income from IT service exports, changes to the tax treatment of sweat equity for IT workers, a reduction in the top personal income tax rate for professionals from 39% to 29%, and a commitment to make the VAT rebate process more organised and automated. The association also noted the budget’s announcement to expand Double Taxation Avoidance Agreements and to support programmes for artificial intelligence, innovation and the digital economy.
The body thanked the Government of Nepal, the Ministry of Finance and relevant agencies for incorporating several items from its pre-budget recommendations. It said these provisions are likely to help increase IT exports, earn foreign exchange, create high-quality jobs and strengthen Nepal’s standing as a global digital services destination.
However, NAS-IT noted that several of its key policy and structural proposals were not included in the budget. It urged the government to consider, in forthcoming policies, a long-term stable tax regime for the IT industry, a special 1% income tax provision for a defined period, export incentive credits, and prioritising domestic companies in government software procurement and system development.
The association also called for the establishment of a National IT Development Board, targeted programmes for international market promotion, and special policy measures for local SaaS, cloud and product-based IT firms.
NAS-IT argued that the proposed 1% income tax is not merely a concession but a strategic necessity to strengthen Nepal’s competitiveness, noting that competing IT destinations such as the Philippines, Pakistan, Bangladesh, Kazakhstan and Vietnam offer attractive tax and policy incentives to their tech industries. The body said adopting a competitive policy framework is essential to expand exports, increase foreign exchange earnings, create high-value jobs and attract international clients and investment.
The association said that the IT industry has the potential to become Nepal’s primary export sector over the next decade, generating foreign exchange worth hundreds of billions of rupees and creating hundreds of thousands of high-paying jobs. It called for close cooperation between the government and the private sector to realise that potential and said it remains committed to working with authorities to help establish Nepal as a leading digital and IT services hub in South Asia.
NAS-IT expressed confidence in the effective implementation of the positive provisions included in the budget and urged the government to address the outstanding recommendations through upcoming policies, programmes and future budgets.
