Surkhet, April 30: The Karnali Province Government is preparing to expand its tax base as part of efforts to strengthen internal revenue, with plans to incorporate new measures into the upcoming fiscal year’s Finance Act.
According to the Ministry of Economic Affairs and Planning, discussions are ongoing to identify additional sectors that can be brought under taxation. A Revenue Advisory Committee is currently drafting a report to guide the expansion. Officials say the province’s limited tax base has long constrained revenue generation.
Senior Revenue Officer Ganesh Bahadur Chand said the expanded framework is targeted for implementation in fiscal year 2026/27. He noted that although taxation powers are shared among federal, provincial, and local governments, some revenues—such as land registration fees—are still collected by the federal government despite falling under provincial and local jurisdiction.
The province is also working to streamline taxation on agricultural income, which was introduced this fiscal year, and improve vehicle tax systems. Authorities are exploring additional revenue sources within provincial jurisdiction.
To discourage idle land use, the government has introduced penalties on uncultivated farmland. Annual fines range from Rs. 500 for up to 10 ropanis, Rs. 1,000 for 10–20 ropanis, and Rs. 1,500 for larger areas.
Revenue mobilisation efforts have shown modest progress. In the first nine months of fiscal year 2025/26, Karnali collected Rs. 480.39 million in internal revenue—an increase of nearly Rs. 70 million compared to the same period last year.
The province has set an ambitious target of Rs. 967.41 million in internal revenue for the current fiscal year, signaling a stronger push toward fiscal self-reliance.
