Domestic Airfare Increases as VAT Inclusion Takes Effect

In a recent development, domestic airline companies in Nepal have announced the implementation of value-added tax (VAT) on their services, effective immediately. The decision comes as the Airlines Operators Association of Nepal aligns with the budget for the upcoming fiscal year 2023-24, aiming to comply with the new taxation policies.

The Airlines Operators Association of Nepal issued a press note today, notifying the public about the inclusion of VAT in domestic airfares. As a result of this decision, passengers will now witness a slight increase in the costs of domestic air travel.

The incorporation of VAT has led to fare adjustments, resulting in a maximum fare increase of up to six percent for domestic services. While the specific rate changes may vary across airlines and routes, passengers can expect a modest rise in ticket prices as the VAT component is now included in the fare calculation.

The introduction of VAT in domestic airfare is part of the government’s broader efforts to enhance revenue collection and ensure a sustainable economic framework. This move brings domestic air travel in line with taxation practices observed in various other sectors.

The impact of the VAT inclusion on domestic airfares is expected to have varying effects on travelers, particularly those who frequently utilize domestic air services for business, tourism, or personal reasons. It is advisable for passengers to be aware of the revised fares and plan their travel, accordingly, considering the adjustments made due to the VAT implementation.

The airline industry plays a crucial role in facilitating connectivity and promoting tourism within Nepal. While the fare adjustment is a necessary measure to comply with taxation policies, it is anticipated that the domestic airline companies will continue to prioritize delivering quality services and maintaining customer satisfaction throughout this transition period.

Passengers are encouraged to stay informed about the revised fares and reach out to the respective airlines for any clarifications or further details regarding the fare adjustments resulting from the VAT inclusion.