Taxpayer Numbers Surge as Nepal Expands Its Revenue Base in FY 2082/83

Kathmandu — Nepal’s tax administration has recorded strong progress in expanding its revenue base during the first half of the current fiscal year 2082/83, with more than 360,000 new taxpayers added to the system. Data from the Inland Revenue Department shows that the total number of active taxpayers has reached over 7.36 million, reflecting growing economic formalization and wider public participation in the tax network.

By the end of the last fiscal year, the number of active taxpayers stood at just under seven million. The sharp rise within six months indicates a combination of improved registration systems, stronger enforcement, and increased awareness among citizens and businesses about tax obligations. Officials say this trend also mirrors gradual recovery in economic activities after recent slowdowns.

Business registrations have continued to grow steadily. The number of commercial Permanent Account Numbers has crossed 2.11 million, with more than 55,000 new business PANs issued during the review period. This growth suggests rising entrepreneurial activity, especially among small and medium enterprises, and improved monitoring of informal businesses entering the formal sector.

The largest increase has been seen in individual PAN registrations. More than 300,000 new individual taxpayers were added in six months, taking the total to over 5.2 million. Revenue officials say salaried employees, freelancers, and service providers are increasingly registering for tax purposes, driven by digital payroll systems, bank requirements, and online service platforms that require PAN verification.

Tax registration among Nepali migrant workers has also increased, though at a slower pace. The number of W-PAN holders rose slightly, reflecting gradual efforts to bring overseas earners into the national tax framework. Experts note that while remittances remain a major pillar of the economy, integrating migrant workers into formal taxation remains a long-term challenge.

Indirect tax registration has also expanded. Value Added Tax registrations increased by more than 13,000, while excise taxpayers grew by nearly 5,000 during the period. These figures indicate closer monitoring of medium and large businesses and improved tracking of goods and services subject to indirect taxation.

Officials at the Ministry of Finance attribute this expansion to wider access to digital registration systems, simplified online services, and stronger coordination among tax offices. They also point to government campaigns aimed at encouraging voluntary compliance and discouraging unregistered economic activity.

Economists say the widening tax base is a positive development for fiscal stability. A larger pool of taxpayers reduces dependence on a small number of large contributors and helps the government mobilize resources more sustainably. It also creates room for increased public spending on infrastructure, health, and social services without excessive borrowing.

However, analysts caution that registration figures alone do not guarantee higher revenue. Many newly registered taxpayers remain inactive or irregular in filing returns and paying dues. Without effective follow-up, monitoring, and support systems, the gap between registered and compliant taxpayers could persist.

They also stress the need to improve taxpayer services, simplify procedures, and build trust in tax institutions. Transparent use of public funds and fair enforcement are seen as key factors in encouraging long-term compliance.

Overall, the latest data reflects steady progress in Nepal’s efforts to broaden its tax base through digitalization and administrative reform. If supported by consistent enforcement and improved service delivery, this trend could strengthen public finances and contribute to more balanced and sustainable economic growth in the years ahead.