NADA Urges Government for Clear, Consistent Automobile Policies Amid Ongoing Amendments and Sector Uncertainty

NADA Automobiles Association of Nepal, the umbrella organization of automobile dealers in the country, has long requested the government to establish a clear and long-term policy regarding various facilities related to electric vehicles. While the government has made policy decisions to prioritize green energy, it has repeatedly amended policies concerning electric vehicles.This inconsistency highlights a significant performance gap and a lack of clarity on the government's intention to support and promote electric vehicles. This uncertainty has severely impacted businesses involved in the electric vehicle sector and discouraged potential entrepreneurs in Nepal. NADA has also requested the government to build more charging stations for electric vehicles.It is important to note that the current budget includes a 5 percent road construction fee on electric vehicles. In recent years, there has been a significant decline in the sale of diesel and petrol vehicles, which has directly impacted the country's revenue. Despite this, the government has increased the road construction fee for all types of vehicles and transportation. Additionally, the current budget appears to be discouraging the import of goods through Letters of Credit (LC).Furthermore, the exemption for automobiles and other goods imported from neighbouring countries like India and China has been removed. To boost sales of diesel and petrol-powered vehicles, the government has introduced relief packages offering tariff rate discounts to businesses. However, NADA welcomes the current budget's provision of no VAT on petrol and diesel vehicles and hopes for improvements in this sector.The current budget also includes a new provision of a 1 percent green tax on lubricating oil and a 0.5 percent green tax on base oil. Additionally, a 10 percent excise duty has been imposed on imported hydraulic oil and brake oil. These measures will increase construction costs and may lead to unauthorized imports from border areas.Therefore, NADA has requested the removal of these tariffs.  However, the request to remove the problematic reference price list and recognize the value submitted by importers has not been addressed.