Nepal's excise systems and the legal frameworks: Agendas for reform

Abstract

Following Nepal's accession to the World Trade Organization (WTO) in 2003, the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in 2004, and implementation of the South Asian Free Trade Area (SAFTA) in 2006, the Government of Nepal has pursued a policy of mobilising excise taxes to compensate for revenue losses resulting from the reduction and abolition of customs tariff rates and other obligations of WTO membership. The principal objective of this article is to analyse the existing system of excise administration in Nepal and identify ways in which the administrative burden may be reduced for both taxpayers and the government. The study identifies an urgent need to shift from the current physical control system to a self-removal system, as well as a need to rationalise the country's excise legislative provisions, in line with international practices.