Department of Inland Revenue prepares procedure for five percent tax on foreign tour

The Department of Inland Revenue has issued a working procedure in regard with the payment of an additional charge on foreign tour packages.

This measure aims to implement the provision requiring Nepali citizens going on foreign trips to pay a five percent tax on their tour package expenses.

According to the procedure, tours and travel companies making arrangements for foreign trips for Nepali clients shall be required to charge an additional five percent fees each from their clients and submit to the government.

Additionally, any foreign firm or company organising a trip to Nepal for the promotion of their business will also need to comply with this tax regulation.

The tax can be paid through designated offices such as the Taxpayers’ Service Office, Inland Revenue Office, Medium-Level Taxpayers’ Office, or Large Taxpayers’ Office. The deadline for payment is set on the 25th day of the following month, and any delays shall incur a 2.5 percent interest charge per month, accumulating to a 15 percent annually.

The government said the provision is centred on two major objectives. Firstly, it aims to encourage Nepali citizens to explore and experience domestic tourism, thus promoting the local and domestic tourism industry and secondly, it intends to prevent capital flight due to foreign trips.