The primary tax on gold in Nepal is the customs duty, which stands at 20%.
Gold Tax in Nepal: Understanding Customs Duty
In Nepal, the tax applied to gold is predominantly in the form of customs duty, levied on its import. This duty rate has been set to influence the market and address cross-border price disparities.
Currently, the customs duty on gold in Nepal is 20%. This rate applies to gold imported into the country.
| Type of Tax | Applicable Rate |
|---|---|
| Customs Duty | 20% |
This adjustment to the customs duty rate was implemented to bring about significant changes in the domestic gold market. Previously, a notable disparity existed between gold prices in Nepal and neighboring countries, particularly India. India had reduced its gold rates, making gold cheaper across the border. This price difference raised concerns about potential smuggling activities, as individuals might opt to purchase gold where it was cheaper and bring it into Nepal unofficially.
By increasing the customs duty to 20%, the Nepali government aimed to:
- Reduce Smuggling: Mitigate the incentive for illegal gold imports by narrowing the price gap with neighboring markets.
- Stabilize the Market: Create a more controlled and stable environment for gold trading within the country.
- Provide Consumer Relief: Although an increase in duty, the overall market adjustments and government efforts are expected to lead to a more balanced market, potentially benefiting consumers in the long run by reducing price volatility.
This revision in customs duty is a key component of the government's strategy to manage the gold market, ensure fair trade practices, and optimize revenue collection.
