As the new fiscal year 2082/83 begins today, the Government of Nepal has officially implemented a 2% luxury tax on gold and gold jewelry imports, making gold more expensive across the country.
This new tax policy was announced in the budget for the current fiscal year and has now come into effect from Thursday, Shrawan 1, 2082 B.S. As a result, traders and customers will now see an increase in the price of gold, reflecting this new tax.
Why the tax was introduced?
The government stated that the luxury tax was introduced to generate additional revenue from high-value and non-essential goods like gold. The aim is to manage foreign exchange reserves, reduce trade deficits, and bring uniformity in taxation of luxury items.
According to officials, gold is considered a luxury product, and such taxation is common in other countries as well. Nepal has now joined the list of countries that tax gold as a luxury commodity.
VAT on diamonds and precious stones also in effect
Along with the 2% luxury tax on gold, a 13% Value Added Tax (VAT) has also been imposed on diamonds and other precious stones used in jewelry. This means buyers of diamond-studded ornaments or jewelry containing precious stones will now have to pay a significantly higher price than before.
This VAT is also a part of the new budget policy and has been enforced starting today.
Impact on gold traders and customers
Gold traders say this new tax will directly affect market prices and customer demand. “Gold was already expensive. With this additional 2% tax, many buyers may hesitate or reduce their purchases,” said one Kathmandu-based jeweler.
Some traders are also worried about a possible rise in gold smuggling, as increased taxes could make unofficial channels more tempting.
