Kathmandu. The government is preparing to remove the VAT (VAT) imposed on electricity. Energy Minister Biraj Bhakta and Finance Minister Dr. Swarnim Wagle have reached an agreement in principle to remove VAT on electricity tariff.

According to a source at the Ministry of Finance, during the meeting between the two ministers, it was agreed to remove 5 percent VAT for domestic customers and 13 percent VAT for other non-domestic customers.

Sources claim that the proposal to remove VAT on electricity will be presented in the next cabinet meeting and the same meeting will decide to remove VAT.

The issue of removing VAT on electricity had already reached the Prime Minister. According to sources, the Ministry of Finance and the Ministry of Energy have agreed to remove VAT on electricity after the Prime Minister appeared positive.

The government had made arrangements to levy VAT on electricity tariff through the budget of the current fiscal year 2083/84. According to the provision made in the budget, 5 percent VAT was levied for domestic customers consuming more than 50 units of electricity and 13 percent for other customers.