Why Vehicles Are Expensive In Nepal?

Buying any 2-wheelers or 4-wheelers or any motorable vehicles is challenging for most Nepalese people. Why? Well, the reason is plain and simple, HIGH IMPORT TAXES. This is why vehicles are expensive in Nepal?

What if I tell you, the import tax on vehicles either they are cars, trucks, scooters, bikes, or any sort of new or even used vehicle that Nepal imposed on them is 241% tax. Yes, you read it right, it’s a huge tax. And that’s only the import tax.

You see Nepal doesn’t manufacture its own vehicles like other foreign countries and neither there’s any manufacturing plant. All the vehicles that we see on roads are imported, all of them. Most of the vehicles are directly imported from India and some are imported from other countries. 

Fossil-fuel vehicles are so heavily taxed that buying a cheap car like Maruti Suzuki Alto 800 STD variant costs only 2.95 lakhs Indian currency (ex-showroom price) which is equivalent to 4.72 lakhs Nepalese currency whereas buying the same model car costs around 19 lakhs (ex-showroom price). After doing all calculations we can figure it out its 4 times the original price.

Still, there are two different tax formats for imported vehicles in Nepal. Nepal imposed 241% of taxes on vehicles that are imported from SAARC countries and 248% outside SAARC countries. 

When vehicles are imported from India, it is taxed at 241% which is a huge number, and after that VAT and profit margin are separately added to each vehicle. It’s applied to all fossil fuel vehicles. So, we can imagine what it’s like buying a vehicle in Nepal. 

Now if we talk about Electric cars or EVs, they are taxed more at around 260%. So buying an electric car is also tough here. If we talk about India and the USA, imported vehicles are taxed at around 182% and 30%.

Reasons Behind Why Vehicles Are Expensive In Nepal

Now you may have understood why Vehicles are so expensive in Nepal? The only and simple answer is the high taxes that are imposed by the Government Of Nepal on the imported vehicles. But have you ever wondered that why there Government Of Nepal takes this amount of taxes on vehicles? 

There are several reasons behind this huge import taxing system in Nepal. Let’s talk about some of the reasons that the government has been telling all of Nepalese first, after that we will be discussing some of the untold reasons behind the high taxes on the import of vehicles in Nepal. 

To Reduce The High Traffic Jam

There are other reasons behind the high taxes on vehicles, but one of the main reasons fed to everyone is that it’s for the better road and development, and to reduce the chances of high traffic on the roads of Nepal. We know the roads in Nepal are small and narrow. But this isn’t a logical reason. In fact, we don’t see any major changes. The present road condition is very much similar to the roads 5 years earlier. Even still there are many places in Nepal where there is still no sign of roads. So, it’s like they are robbing our money from taxing.

Vehicles Are Considered As Luxury Goods

Many of you might not agree on this, though the thing is we Nepalese considered vehicles like cars and bikes only as luxury goods. And according to most of the Nepalese society cars and vehicles are purchased only by high-class people for their luxurious life. We have forgotten that vehicles like cars and bikes aren’t luxury goods, but indeed they are the basic needs of every people in this modern world.

To Reduce Climate Change And Air-Pollution

We agree that if there will be more vehicles in Nepal, then there will be more air pollution that can cause a change in the climate of Nepal also. And this may be the reason that the Government of Nepal has been willingly charging this huge tax so that there won’t be more vehicles on the roads in Nepal, and there won’t be any air pollution and climate change. But do you think this is the reason?
Well, I don’t think so. If this could have been the reason, then the taxes on Electric Vehicles should have reduced so that others could also get motivated to import electric vehicles in Nepal.

To Reduce The Cost Of Import Of High Petroleum In Nepal

Another reason that has been fed to everyone in Nepal is a landlocked country and it has to depend more on import things than export. So, for the betterment of the country, there should be more focus on exports than imports. And if we import more vehicles to the country, we have to import high petroleum to Nepal that will cost so much. 

But still, this isn’t the real thing. If this is true, then the government should have again reduced the tax on electric vehicles so that there won’t have to import more petroleum to the country. 

Presently, there are approximately 1,150 four-wheeler electric vehicles (EVs), 4,700 electric bikes and, 31,000 e-rickshaws in Nepal, according to automobile dealers. The operation of 1,150 four-wheelers, in one year, consumes electricity worth Rs 20 million and saves the fuel import worth Rs 100 million. Likewise, these four-wheelers reduce carbon dioxide emissions by 2,400 tonnes.

As we see the reasons are crystal and clear that are being given by the government, and we also know how reasonable and valid these reasons are. 

Effects Of High Taxes On The Vehicles

Now let’s talk about some of the effects of high imported vehicles taxes on the common Nepalese people:

Price Of Vehicles

The first effect of this is obviously the increase in the price of vehicles like cars, bikes, trucks, etc. 

Increase In The Expenses Of Goods

Due to the high prices of vehicles like trucks and vans that are used for transporting goods from one place to another, the expenses of almost all the goods in Nepal have been increasing with the increase in the tax. 

Costly Public Transportation Services

Besides the increase in the expenses of other things, the expenses of public transportation are also high in Nepal. 

Death Due To Less Safe Vehicles

As you know not everyone in Nepal can afford good cars or SUVs in Nepal due to their high price. That’s why most Nepalese somehow purchase the cars and SUVs that have zero safety rating at the international level in around 20-30 lakhs Nepalese Rupees. Such vehicles are easily available in 4 to 5 lakhs Nepalese Rupees in other countries like India. This is the reason that most of the people in Nepal die yearly in accidents. 

The problem is not only that, due to not proper development of roads, the accident rate is not reduced by major change. After paying so huge money to buy a car here, we have expectations about our safety while riding it. But there’s this brand Maruti Suzuki which produces the worst level build quality cars and these cars are also imported to Nepal. Not only that it has good sales in Nepal cause it’s cheaper than other cars but paying 20-30 lakhs isn’t less so we expect better safety. 

Exact Reasons Behind Why Vehicles Are Expensive In Nepal

We all know those aren’t the actual reasons behind the high taxes on imported vehicles in Nepal. These are the reasons that we have personally figured out behind the expenses of vehicles in Nepal. So these are the points that you may or you may not agree with us. It’s all up to you.

Corruption

This is something that can’t be simply eradicated from Nepal. The root reason or cause of almost every problem in Nepal is corruption. It’s not only about the corruption at the local level of government or the central level of government. Corruption in Nepal is from the local level to the central level and this is how it is almost impossible to solve the problem of corruption in Nepal.

Poor Planning

We don’t think there has been ever an effective execution and implementation of plans made in the transportation field in the history of Nepal. Besides giving a speech by the leaders, we have never witnessed any effective policies or programs that can improve the problem of vehicles in Nepal. Instead of this, whenever something came out related to this, that is only the announcement of an increase in the taxes.

Weak Leadership

If the leadership is effective and good, then neither corruption nor other factors can stop this problem to solve. 

Intention Of Government

We don’t think the government of Nepal has ever wanted their general people to ride their private vehicles. It’s not only about the last few years or decades. This problem has been prolonging in Nepal for over a year. 

The Business Ecosystem Of Transportation Business

Last but not the least, there might be some business strategy of big businessmen of Nepal not to let the decrease in the price of vehicles in Nepal. There might be a whole ecosystem of this strategy that has connected the big businessmen and the politicians together to run this business of expense. These group of the businessman who invests their money in these sectors is normally targeting middle-class and lower-class people of Nepal. 

Final Opinion

After all, we can only make assumptions about the reasons even knowing everything. We all know there is something seriously wrong with the mindset of the government officials to raise the taxes on imported vehicles. If collecting a higher importing tax would solve the traffic crowd problem then Nepal would have fixed it by now and other countries would have followed it a step. Sadly it’s getting much worse. It’s not just cars, even motorbikes have high importing tax. We are paying almost double the price for Indian motorbikes instead we could have saved money to send our children to a better school, invest inland, and much more. Also, note that all these public micro vans and buses that we travel on a daily basis were bought at double price, so we are simply paying higher traveling fees to cover their cost. Also, our food and vegetables are being delivered by these expensive vehicles, guess who is paying the cost, we the consumer. Charging higher taxes on imported vehicles causes a devastating impact on the overall economy. Nepal has this policy because our government is corrupt, lacks good leadership, and planning. They are more concerned to fill their own disgusting inflated tummy.