Government Can Scrap 3% Equity Levy Without Parliament, Economic Act Allows Tax Exemptions
Although the 3% Education and Health Equity Levy has become law, the government can revoke it through a Cabinet decision under provisions of the Economic Act 2083, without requiring a fresh parliamentary amendment.
The government's decision to withdraw the recently introduced 3% Education and Health Equity Levy can be implemented without amending the law through Parliament, as the Economic Act 2083 grants the executive authority to revise or exempt taxes. Section 18 of the Act empowers the Government of Nepal to increase, reduce, or provide partial or full exemptions on taxes, duties, fees, and charges through a Cabinet decision, with the changes taking effect once published in the Nepal Gazette. Following Prime Minister Balen Shah's announcement that the levy would not be enforced after widespread public opposition, officials say the exemption can be formalized under the existing legal framework. Since the levy, effective from Shrawan 1, was due to be deposited only after the end of the first quarter, schools and health institutions will not have to pay it once the exemption is notified. The move also ensures that educational institutions will not need to pass the additional cost on to parents while collecting fees.