Discover how Nepal’s FY 2082/83 budget is prepared, from IRD Nepal’s tax role to Nepal Parliament’s approval process and what could change from last year.

So, it’s Jestha 15 again, the budget day in Nepal.

If you're like most people, you might hear the word "budget" and instantly feel like it's not your thing. Maybe you think it’s just some boring government ritual, or something that only accountants, economists, or tax officers at IRD Nepal care about.

But here’s the truth: the Nepal budget affects everything.
From the price of your favorite snacks… to how much tax you pay on your salary, to whether your local health post gets a doctor or not. It’s all connected to that one document read out by the Finance Minister in the Parliament of Nepal every Jestha 15.

Yep, that long speech in Parliament? That’s not just for show. It’s actually the government’s financial game plan for the year, deciding what to spend on, how to collect money, and what goals to chase.

And this year’s budget for FY 2082/83 (that's mid-July 2025 to mid-July 2026, by our calendar) is kind of a big deal. Why?

Because Nepal’s economy is stuck in a strange limbo. Inflation is still hurting households. Businesses are just trying to recover from slow demand. And the government is under pressure to bring in more revenue without making life harder for taxpayers. Sounds tricky, right?

That’s why this year’s budget is being watched closely. Not just by bankers and policy wonks, but by regular folks like you and me.

So, let’s break it all down.

What Is a Fiscal Budget, and Why Does Nepal Even Make One?

Alright, before we go any further, let’s answer the most basic question:

What exactly is a budget?

Think of it like this: a budget is a spending and earning plan. Just like you might sit down and plan your salary or business income; how much goes into rent, groceries, savings, or a new phone; the government does the same. Only on a massive scale.

The Nepal budget, officially known as the Annual Fiscal Budget, is where the government lays out:

• How much money it thinks it will earn (mostly through taxes, a bit from foreign aid and loans)
• Where it wants to spend that money (like education, roads, hospitals, army, or digital tech)
• And what policies it wants to push, whether that's encouraging exports, creating jobs, or maybe even promoting electric vehicles (EVs)

This budget is usually for one fiscal year. In Nepal, that starts in Shrawan every year.

So, Why Make a Budget?

Simple: because resources are limited, and the country has a lot of needs.

Nepal can’t spend endlessly. So it has to choose carefully. The budget is where those choices get made transparently (well, mostly), and presented in front of the Parliament of Nepal.

Here’s why it matters:

• It allocates resources: Decides which sectors get more or less money
• It sets tax policies: Will the tax rate in Nepal go up? Will new goods be taxed? Will some groups get exemptions?
• It sends signals: Investors, banks, businesses, and international partners all use the budget to understand Nepal’s priorities
• It guides development: Whether we focus on hydropower, agriculture, tech, or tourism

What Goes Inside the Budget?

There are usually three big spending buckets:

1. Recurrent Expenditure – The regular stuff: salaries of teachers and police, pensions, government operations.
    
2. Capital Expenditure – Development work: building roads, airports, hospitals; the “future-focused” stuff.
    
3. Financial Management – Paying back loans, managing government debts.

Each year, the Ministry of Finance sets a total budget and decides how much to allocate under each of these headings.

And Who Approves This Budget?

The budget is proposed by the Finance Minister, but it’s the Parliament of Nepal that must debate, review, and approve it.

So yes, it’s not just a Ministry decision. Elected lawmakers get a say too. That’s democracy in action.

In the next section, we’ll take a look at how the budget is actually prepared, because it’s not like someone just wakes up one morning and writes it on a napkin. There’s a whole process behind it.

So, Who Actually Makes the Budget, and How?

Alright, we now know what the budget is and why it matters.

But how does it actually come together? Is it just a bunch of government officials sitting in a room guessing how much money to spend?

Not quite.

There’s actually a structured process behind how the Nepal budget is prepared every year. And this year, for FY 2082/83, it’s gotten even more interesting.

Let’s walk through the process, step by step.

1. It All Starts with a Look Back: The Economic Survey

Before planning for the future, the government takes stock of the past. This happens through the Economic Survey, a document that gives a full report card of how Nepal’s economy did over the past year.

This includes things like:

• How much tax was collected
• How much was actually spent (especially on development)
• How the economy grew (or didn’t)
• Sectors that are doing well or need support

This survey sets the tone; is the economy in good shape to expand spending, or is it time to tighten belts?

2. This Year’s Big Move: A High-Level Reform Committee

Here’s something new and important this time around:

For the first time in years, the government formed a High-Level Economic Reform Recommendation Commission, a group of seasoned economists, former finance secretaries, private sector leaders, and planners.

Their job was to look at Nepal’s long-term economic bottlenecks and recommend bold, practical reforms; things like:

• Making tax policies clearer and more stable
• Attracting long-term investment
• Simplifying government procedures
• Improving capital expenditure
• Strengthening local governments

Their report, submitted just ahead of this year’s budget, is expected to directly influence the Nepal budget for 2082/83.

Check out the recommendations they made regarding digital nomad visa in Nepal!

So this year’s budget may not just be about annual numbers, it could also be a reform-driven blueprint for the next 3–5 years.

3. IRD Nepal Also Asked the Public for Suggestions

Another great thing that happened?

The Inland Revenue Department (IRD Nepal), the very body that handles tax collection, actually opened a public call for suggestions for the upcoming budget.

They invited citizens, business owners, tax professionals, and other stakeholders to send in ideas on how to improve Nepal’s tax system, things like:

• Which taxes feel too burdensome?
• Where is compliance too confusing?
• How can tax collection be fairer?

This kind of participatory budgeting is still new for Nepal, but it’s a welcome sign that the system is slowly becoming more responsive and inclusive.

4. Budget Ceilings and Ministry Requests

While all that’s going on, the Ministry of Finance is busy issuing “budget ceilings”, basically telling each ministry how much money they can plan to use next year.

Each ministry then sends in their proposals. For example:

“We want to launch a new agri-subsidy scheme and need NPR 8 billion.”
“We plan to improve highways in Province 1 and need funding for it.”

Naturally, the requests add up to way more than what’s affordable. That’s where choices begin.

5. The Finance Ministry Picks and Chooses

Now the real budgeting begins.

The Budget Division inside the Ministry of Finance goes through all the proposals. It evaluates:

• Which programs are most urgent?
• What aligns with government priorities?
• Where can we get the best results per rupee spent?

This is where political promises meet financial reality.

6. Budget Principles Are Shared in Parliament

Roughly two weeks before the budget speech, the government presents its budget principles and priorities in the Parliament of Nepal.

This is a roadmap saying, “Here’s what we’ll focus on.” It might mention digital transformation, employment generation, or private sector revitalization.

This year, it’s also expected that many of the Economic Reform Commission’s ideas will be reflected in these principles.

7. The Big Reveal: Budget Day on Jestha 15

Then comes the moment everyone’s watching for: budget day.

The Finance Minister steps into the Parliament of Nepal and reads out the annual budget speech.

We’ll hear:

• Total budget size
• How much money goes where
• Any changes in the tax rate in Nepal
• New policies or reforms
• Revenue targets and foreign aid plans

8. From Proposal to Law: Debate, Amendments, Approval

Once the speech is over, Parliament doesn’t just clap and move on.

There are debates. Critiques. Amendments. And eventually, the budget must be passed through:

• The Appropriation Bill – which authorizes spending
• The Finance Bill – which legally defines taxes and exemptions (this is where IRD Nepal comes into play)

Only after this process does the budget become official law, and implementation begins from mid-July.

So that’s how Nepal builds its national spending plan with a mix of public feedback, technical review, political negotiation, and now, a serious push for long-term reform.

Next, let’s rewind and take a quick look at last year’s budget, FY 2081/82, and see what worked, what didn’t, and what we can learn from it.

A Quick Look Back: What Was in the Nepal Budget 2081/82?

Before we look ahead to the new Nepal budget for 2082/83, let’s take a moment to revisit last year’s budget (FY 2081/82) because understanding what was planned before helps us know what needs fixing now.

1. Total Budget: NPR 1,860.30 Billion

Yep, that was the total size of the government’s wallet for the year. It was one of Nepal’s biggest budgets ever, slightly bigger than the year before (NPR 1,751.31B in FY 2080/81) and nearly NPR 582 billion more than the budget just six years ago in FY 2075/76.

2. Where Was That Money Going?

The budget was split into three major parts:

Let’s simplify what that means:

• Current Expenditure = Day-to-day expenses like government salaries, office costs, pensions, and subsidies.
   
• Capital Expenditure = Long-term development: roads, schools, bridges, hydropower plants, etc.
   
• Financial Management = Debt repayment and interest payments (basically, paying past dues).

More than 60 paisa in every rupee was going just to run the system, not build new things. That’s been a growing concern in every Nepal budget.

3. Where Was the Money Coming From?

This is where things got interesting. The government expected to earn most of its income from taxes, but it still had to borrow a big chunk to make ends meet.

So basically:

• About two-thirds of the budget was expected to come from taxes collected by IRD Nepal and customs offices.
• A small piece was foreign aid.
• And almost one-third was to be borrowed, adding to Nepal’s growing debt load.

Inflation vs. Growth: The Economic Mood

Looking at the chart on the right, you can see how the economy performed over recent years:

• GDP growth in 2081/82 was projected at 5.5%, up from 1.9% in 2080/81, a hopeful sign of recovery.
• Inflation was projected at 6.0%, a slight improvement from the previous year’s target of 7.8%.

This balance; higher growth but persistent inflation, created a tough environment for people and businesses alike.

But of course, big announcements are only one side of the story. Whether things actually got done is a whole different question, and that's what we’ll explore in the next section.

So, How Did the Economy Actually Perform?

All right, the budget set some bold targets: 5.5% GDP growth and 6% inflation. But how did things really play out in the real world?

Referring to the Economic Bulletin (Falgun 2081) from the Ministry of Finance, we have a decent picture of how things went up to Falgun 2081, the first 8 months of the fiscal year.

Let’s break it down.

1. Revenue Collection Lagging Behind

From Shrawan to Falgun (first 8 months of 2081/82), the government collected about NPR 683.4 billion in revenue.

To put that into context:

• This was 12.7% higher than last year’s revenue at this point
• But still below the target needed to meet full-year expectations

Breakdown of key revenue sources:

Clearly, IRD Nepal is doing a lot of the heavy lifting here, especially through VAT and income tax, which remain the biggest contributors.

But despite their efforts, the shortfall hints at underlying issues: sluggish business recovery, reduced imports, and slow demand in some sectors.

2. Development Spending: The Usual Story

This one’s frustrating but not new.

Out of the allocated NPR 352.35 billion for capital expenditure (development), the government had only managed to spend a fraction by Falgun.

Delays in project implementation, bureaucratic red tape, and tender bottlenecks meant development projects, especially in infrastructure, remained way behind schedule.

This underperformance continues to be a major criticism of every Nepal budget in recent years.

3. Public Debt: Still Climbing

As of mid-March 2025, Nepal’s total public debt had reached about NPR 2.3 trillion, nearly evenly split between:

• Domestic debt: borrowed from banks, financial institutions, citizens
• External debt: borrowed from development partners and foreign governments

Servicing this debt (i.e. paying interest and principal) is becoming a heavier burden each year, which is why almost 20% of the budget now goes to financial management.

If you’re curious as to how the Nepali economy performed in FY 2081/82, here’s the highlights from NRB’s monetary policy review.

The Big Problems the New Nepal Budget Must Address

If the FY 2081/82 budget showed us anything, it’s this: the numbers might look ambitious, but execution is where everything breaks down.

So as the new Nepal budget for FY 2082/83 is about to be announced, here are some of the major issues it must take seriously, or risk repeating the same cycle of underperformance.

1. The Capital Spending Conundrum

Let’s face it. Nepal has a chronic issue with capital expenditure.

Every year, we allocate billions to build roads, schools, power plants, and more. But by the end of the year, only 50%–60% actually gets used, and most of that happens in the last two months.

Why?

• Delayed project approvals
• Messy procurement processes
• Political interference in local budgets
• Lack of trained manpower in local governments

If we’re serious about development, the budget needs to focus on quality planning, early implementation, and accountability.

2. Rising Recurrent Expenses = Budget Bloating

Over 60% of the previous Nepal budget went into recurrent expenditure; that’s salaries, pensions, social security, and admin costs.

Don’t get this wrong; public servants and retirees deserve fair pay. But when such a large chunk of the budget is just running the system, there’s little left for growth-oriented investment.

If this trend continues unchecked, future governments might find themselves spending more to maintain the system than to build the nation.

3. Revenue Shortfall and Overreliance on Debt

As we saw in the Economic Bulletin (Falgun 2081), revenue collection missed targets despite growth.

The tax base is still narrow, and the system heavily depends on indirect taxes like VAT and excise rather than progressive income taxation. This places more burden on ordinary consumers than big earners.

Meanwhile, with debt hitting NPR 2.3 trillion, Nepal is inching closer to a fiscal stress zone.

It’s time the government, and IRD Nepal in particular, rethink tax policy, enforcement, and fairness.

4. Policy Instability = Low Investor Confidence

Ask any business owner or foreign investor in Nepal, and you’ll hear this complaint loud and clear:

“The rules keep changing. We can’t plan long-term.”

From surprise tax hikes to unclear customs rules and unpredictable court rulings, policy inconsistency is damaging Nepal’s business climate.

This year’s budget must send a strong message: Nepal means business, and the rules won’t shift overnight.

5. Misuse of Grants to Provinces and Local Units

While fiscal federalism is a great concept, its implementation has been patchy at best.

Billions are being transferred from the central government to provinces and municipalities, but many local governments don’t have the capacity to use the funds effectively. There’s also very little transparency on where the money goes.

The FY 2082/83 budget must include stronger monitoring, auditing, and capacity building measures at the local level, or risk massive leakages.

What People Expect from Nepal Budget 2082/83

So, what do people want from this year’s budget?

Yes, tax cuts would be nice. More subsidies too. But more than that, Nepalis want clarity, common sense, and commitment to long-term reform.

Let’s walk through the major expectations; from citizens and business owners to investors and economists.

1. The Taxpayer: Clarity, Not Complexity

Let’s be real. Nepal’s tax system is packed with confusing rules, vague terms, and surprise clauses. Take this example:

That Weird Clause in Section 12(c) of the Income Tax Act.

In 2078, the government proposed a brilliant idea:

Give seed funding (up to Rs. 1 lakh each) to five startups, and you could deduct the total (Rs. 5 lakh) from your taxable income.

It was the first real tax incentive for angel investors in Nepal, a way to promote innovation and reduce your tax burden under the current tax rate in Nepal.

But when the law was finalized, someone slipped in a single word: “grant”.

Now, to claim the Rs. 1.95 lakh tax saving, you have to donate Rs. 5 lakh; without ownership, without return, without any stake in the startup’s success.

So instead of encouraging investment, the law basically says:

“Give your money away, and you might save some tax.”

Naturally, most rational people will just not do it.

Add that on top of the, you get the picture.

These are the kinds of legal mess the new budget needs to fix. Clear intent, clear language, real incentives.

And that brings us to the next part.

2. What Experts Want: Reform, Not Just Announcements

Economists, business groups, and reform advocates are watching this year’s Nepal budget closely. Because this time, there’s a real chance to change direction.

Because the government received a full report from the High-Level Economic Reform Recommendation Commission.

So the big expectation is: “Will the government actually implement these reforms, or just say nice things and move on?”

If even 30–40% of those ideas make it into the budget and laws, we could see real movement toward a more functional, investment-friendly economy.

But if it’s ignored, then it’s just another missed opportunity.

So, How Will This Year’s Budget Affect Us?

Let’s skip the jargon and get real.

“Will my salary stretch further?”
“Will taxes eat up my freelance income?”
“Will my small business finally get a break?”

Here’s how the Nepal budget for FY 2082/83 could directly affect your daily life, depending on who you are.

1. If You’re a Salaried Worker

Let’s say you make Rs. 50,000 a month.
You're already dealing with rent hikes, school fees, and food prices that don’t stop rising. And then, every payday? TAX.

The tax rate in Nepal has remained mostly the same for years. But with inflation chewing up your real income, people are expecting relief this time.

So, what to look for?

• Will the basic exemption limit go up so you pay tax only above, say, Rs. 6 lakh a year?
• The minimum wage rate is revised every two years, so how much will it increase by this year?

2. If You Freelance, Design, or Work Online

Freelancers and digital creators are now on IRD Nepal’s radar, and it’s confusing.

TDS deductions, unclear VAT rules, and pressure to register are frustrating people who just want to work honestly.

This budget needs to bring clarity for Nepal’s growing digital workforce.

3. If You Run a Small Business

Shop owners, restaurants, and local service providers are all wondering:

• Will VAT refunds come on time?
• Will digital billing be forced or rewarded?
• Will tax rates for small businesses be adjusted?

More than relief, what you really want is stability. No more surprise rule changes mid-year.

4. If You’re in Agriculture or Outside the Cities

Fuel, fertilizer, and seed prices are real pain points.
You don’t want more slogans, you want irrigation, storage, compensation, and market access.

And if you're trying agri-tech or modern farming? You need policies that don’t punish innovation.

5. If You’re a Student or Job Seeker

You want skills that lead to jobs, not just three-day training programs with a certificate.

This budget needs to invest in:

• Tech, tourism, and green jobs
• Startup and freelancing ecosystems
• Real opportunities to stay and grow in Nepal

6. If You Think About the Bigger Picture

Let’s fix the Section 12(c) mess.
Nepal needs real angel investment, not weird clauses that ask you to donate money instead of investing.

And most of all, we need a system that rewards builders, not just rule-followers.

This year’s Nepal budget could actually shift the needle; if it remembers who it’s really for.

What Should You Watch For?

The Nepal budget for FY 2082/83 will be tabled in the Parliament of Nepal today (Jestha 15). Once that happens, here’s what you should keep an eye on:

1. The Budget Speech by the Finance Minister

This outlines the vision, priorities, and key policies. It’s usually full of announcements, but some of them never make it into the actual law. So while it’s exciting, don’t rely on headlines alone.

2. The Red Book (Budget Details)

This is where the real action is. It breaks down:

• Ministry-wise and province-wise allocations
• Revenue targets and borrowing estimates
• Major infrastructure and investment projects

3. The Finance Bill

This one matters most for taxpayers.

The Finance Bill is what actually changes the tax rate in Nepal, defines new tax rules, and amends laws like the Income Tax Act and VAT Act.

So even if the speech says “tax relief for small businesses”, it’s the Finance Bill that decides how, when, and for whom.

4. Parliamentary Debates and Amendments

The Parliament of Nepal doesn’t just clap and pass the budget. MPs can ask for changes, delay approvals, or request clarifications, especially if they think certain groups are left out.

So if you’re a business owner, student, or advocate, this is your window to raise issues and lobby for improvements.

5. What You Can Do as a Citizen

• Follow updates from IRD Nepal, the Ministry of Finance, and trusted news sources
• Read budget summaries from economists, firms like ICAN/NBSM, or legal/tax blogs
• Use online tools to calculate how the new tax rules affect your salary or business

Final Thoughts

Every year, the Nepal budget promises growth, jobs, development, and stability.

But year after year, we see the same headlines:
"Low capital spending."
"Revenue shortfall."
"Unspent allocations."
"Public debt rising."
And ordinary people; you, me, the small shopkeeper, the fresh graduate, the freelancer, are left wondering:

“Is this really for us?”

The budget is more than a spreadsheet. It’s a mirror.
It reflects what the government values, who it listens to, and what kind of future it's trying to build.

This year, more than ever, Nepal needs a budget that’s:

• Grounded in reality, not inflated hopes
• Clear and simple, not buried in jargon
• Fair and inclusive, not just politically convenient
• And above all, credible and implementable

Will the Parliament of Nepal ask the right questions?
Will IRD Nepal be empowered to reform, not just enforce?
Will taxpayers finally feel like partners in progress, not just sources of revenue?

Let’s watch closely, ask loudly, and demand better.

Because Nepal doesn’t just need a new budget.

It needs a budget that works; for everyone.

Stay tuned for a full breakdown of the budget for FY 2082/83!

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