EV Policy & Tax Clarity: Nepal’s EV tax rules are in flux again. The budget shifts EV levies away from motor “peak power” to customs value, with a flat 20% customs duty and a new “clean infrastructure investment duty” based on vehicle value—raising concerns that EV market prices could jump by up to Rs 4 million. Budget Push for IT & Digital Tax Admin: The government also rolled out incentives for IT exports (50% income tax exemption) and lets “sweat equity” for IT professionals be fully deductible; it plans AI-enabled e-assessment and a paperless, faceless, contactless tax system, alongside risk-based audits. Import Substitution via Tariffs: An “internal production promotion and protection fee” will hit imports with domestic substitutes, with duties (often 5–15%) covering dairy, tea/coffee, spices, forest-based goods, and parts of footwear inputs. Foreign Investment & Capital Market Reforms: Foreign investors can now notify NRB instead of seeking prior approval for repatriation, and NRNs can access the secondary securities market; capital gains tax is set as a final tax, with CGT rates raised for short-term traders. Energy Tax Backlash: Opposition leaders are pushing back on a 5% VAT on electricity consumption above 50 units, arguing it discourages clean power use. Petroleum Step Forward: DoMG is preparing a second-phase petroleum agreement with China after first-phase exploration in Dailekh, aiming to move toward commercial extraction. Private Sector Mood: Business groups welcomed higher capital expenditure and infrastructure spending, while critics say the budget still leans too much on debt and doesn’t sufficiently protect farmers and workers.