The Nepal government has decided to grant income tax relief to construction and service companies working under the Millennium Challenge Corporation (MCC) Compact through MCA-Nepal for the ongoing fiscal year 2082/83.
According to the Ministry of Finance, the Cabinet’s decision to grant this tax relief to MCC project-related companies has been officially published in the government gazette.
The notice mentions that the decision was made under Sub-section (1) of Section 18 of the Financial Act, 2082. It further states, “Based on the decision of the Government of Nepal’s Cabinet meeting held on 18th Shrawan 2082, income tax exemption will be provided to companies involved in this project.”
This means companies registered as branches or permanent establishments in Nepal that are working under the MCC Compact through MCA-Nepal will not have to pay income tax on their earnings from MCC funding (including Nepal government’s contribution) for this fiscal year.
Finance Secretary Ghanshyam Upadhyaya said that this provision allows the government to grant special tax exemptions for certain projects or organizations when needed.
The main beneficiaries of this move will be companies working on major infrastructure projects under the MCC such as transmission lines and road improvement works. The decision is expected to help speed up progress on these large-scale development projects.
