Nepal has begun modernizing its customs system, a reform businesses have been demanding for years. The new system aims to make trade faster, more transparent, and reduce unnecessary checks on highways.
Previously, customs officials often ignored the actual bills submitted by businesses. Instead, they relied on a fixed reference price book to assess imports. Even if a business paid more than the listed price, the declared bill might not be accepted. This created delays, extra costs, and difficulties, especially for small businesses.
Nepal joined the World Trade Organization in 2002 and signed several agreements to modernize customs procedures. The WTO’s GATT agreement includes six methods for valuing imported goods, giving businesses flexibility in declaring prices. Yet, Nepal’s customs largely stuck to the outdated reference book, ignoring these modern valuation methods.
Finance Minister Rameshwar Khanal has introduced an electronic customs valuation system. The system was first tested in Biratnagar and has now been implemented at Birgunj, the country’s largest customs point. Businesses can now declare bills electronically, and the system automatically evaluates and clears them.
The system includes an “electronic risk engine” to flag suspicious transactions. Investigations will be conducted at the business location rather than stopping trucks on highways. Officials believe this will reduce revenue leakage and encourage businesses to report honestly.
The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has welcomed the new system. FNCCI President Chandra Prasad Dhakal urged all businesses to adopt the digital valuation process at every customs point, calling it the start of real modernization in Nepal’s trade system.
