#NepalEconomy #GovernmentReven
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By Sandeep Chaudhary

Government Revenue Collection at Rs. 84.7B in One Month – A Mixed Fiscal Signal

Government Revenue Collection at Rs. 84.7B in One Month – A Mixed Fiscal Signal

Nepal’s government collected Rs. 84.7 billion in total revenue during the first month of FY 2025/26, showing a 10.5% decline compared to last year’s Rs. 94.7 billion. While some tax categories such as excise (+14.8%) and VAT (+4.8%)registered positive growth, major pillars like income tax (−1.8%) and non-tax revenue (−78.1%) dragged overall revenue performance down.

Value Added Tax (VAT) remained the largest contributor, generating Rs. 27.6 billion (32.4% of total revenue), followed by income tax at Rs. 22.4 billion (26.3%). Customs duty also rose slightly to Rs. 16.6 billion, reflecting stable import activity despite policy uncertainty. Meanwhile, excise revenue grew to Rs. 13.9 billion, boosted by higher sales of alcohol, tobacco, and imported goods.

However, the steep decline in non-tax revenue from dividends, royalties, and service fees has raised concerns about the government’s fiscal sustainability, as it signals weaker income from state-owned enterprises and other non-tax sources. Analysts warn that without broadening the tax base and improving non-tax income streams, the government may struggle to meet its ambitious fiscal targets.

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