Nepal's Government Scraps Controversial 3% Equity Tax on Education and Health Sectors

In a significant move, the Nepalese government has decided to withdraw the controversial 3% equity tax imposed on private education and health sectors. This decision follows a wave of public criticism and discontent regarding the newly introduced levy. Prime Minister Balendra Shah announced the suspension of the tax, which was initially intended to broaden the tax base and organize the economy. The Cabinet's endorsement of this proposal marks a notable response to the citizens' concerns, reflecting the government's willingness to listen to public sentiment. Discover more about the implications of this decision and the reactions it has sparked.

By Narendra Chaudhary Jul 22, 2026, 23:29 IST

Nepal's Decision to Revoke the Equity Tax

Kathmandu: On Wednesday, the government of Nepal officially decided to eliminate the 3% equity tax that was levied on the private education and healthcare sectors, a move that came after significant public backlash.

The Council of Ministers approved Finance Minister Swarnim Wagle's proposal to abolish the 3% Education and Health Equity Fee, as outlined in Section 18(1) of the Finance Act, 2083, according to sources within the cabinet.

The Cabinet has fully endorsed the removal of this tax.

This decision to revoke the tax was prompted by increasing public discontent regarding the recently imposed charge.

In a statement on social media, Prime Minister Balendra Shah announced that the government has opted not to enforce the equity tax on the private education and health sectors at this time.

This 3% tax was introduced last month as part of the budget for the new fiscal year and was set to take effect from July 17.

Shah explained that the tax was intended to broaden the tax base and enhance economic organization. However, in light of public feedback, the government has chosen to halt its implementation.