The Need for Progressive Reforms in Domestic Revenue Mobilization in Nepal
This report is aims at bringing to the fore the regressive nature of the taxation system in Nepal and the grave concerns of fiscal indiscipline, including the issues of policy corruption, avoidance and evasion, associated with taxation in Nepal. Challenging the narrative that the country is significantly resource-constrained to finance people’s recovery, this report argues that adequate revenue generation for funding public infrastructure, social protection and public services is possible.
This can be achieved by enhancing tax systems and administration, strengthening enforcement mechanisms, reducing tax evasion and avoidance, making taxation more progressive, and broadening the tax base to include newer forms of taxation targeting the ultra-rich. The evidence presented in this report is expected to pressurise the government towards adopting a more progressive taxation system combined with effective fiscal governance that would generate more revenue to state treasury.
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