Nepal's Finance Minister Dr. Swarnim Wagle presented the most reform-oriented budget in recent memory on 29 May 2026, allocating a record NPR 2,124 billion, an 8.2% increase over the previous year. The budget's standout measures include doubling the personal income tax exemption limit to NPR 10 lakh, cutting the top individual tax rate from 39% to 29%, simplifying customs tariffs from 11 tiers to 7, abolishing excise duty on 360 items, and introducing a comprehensive tax dispute amnesty that allows court-pending cases to be settled by paying just a 1% surcharge. On the development side, NPR 286 billion has been allocated to roads and urban infrastructure, NPR 85 billion to clean energy with a target of adding 1,040 MW to bring total capacity to 5,535 MW, and NPR 102 billion to health, with an ambitious goal of bringing 90% of Nepalis under health insurance within three years. Landmark new initiatives include Nepal's first Sovereign AI Computing Centre powered by hydropower, an Investment Express single-window system for investors, Nepal's first Offshore Rupee Bond and Diaspora Bond, a Green Hydrogen pilot plant, and a 100 MW battery energy storage system. While the budget sets a 7% GDP growth target and signals a genuine shift toward a production-based, digitally-enabled economy, the critical test remains execution, particularly in capital budget utilisation, which has historically averaged only 55–65%, and in addressing the chronic tax revenue shortfall and rising debt financing, which now stands at 30.9% of the total budget.
NBSM & Associates, Chartered Accountants, is pleased to share this analysis as part of our ongoing commitment to keeping our clients and stakeholders informed on Nepal's evolving fiscal and tax landscape.
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