The government has backed down from the 3 percent tax levied on the private education and health sectors.
While presenting the budget on May 29, Finance Minister Swarnim Wagle had introduced a 3 percent equity tax on the private education and health sectors. The tax had come into effect on July 17.
Prime Minister Balen Shah has said that this tax will not be collected.
"It was observed that if the 3 percent equity tax levied on the private education and health sectors were implemented as previously announced, the general public would have to face additional expenses and despair. Therefore, after consulting with Honorable Finance Minister Swarnim Wagle, it has been decided not to implement the education equity fee and health equity fee for now," PM Shah posted on the social media platform Facebook on Tuesday.
The government had aimed to collect Rs 2.21 billion annually from the private education equity tax and Rs 2.38 billion from the health equity tax.
Only on Monday, Finance Minister Wagle had discussed with subordinate officials regarding how much revenue would be raised from this tax and what its impact would be.
Officials had reported that although the tax amount was small, it could contribute to legal transactions and an increase in income tax.
Political parties, including the main opposition Nepali Congress, had opposed the decision to impose tax on private education and healthcare.
Nepali Congress President Gagan Thapa had said that the public would not be able to bear the tax imposed on education and healthcare and called for the withdrawal of the decision.
