Mayors can reduce vehicle tax

  • Get News Alerts

The political climate too has heated up, to go with the summer heat, because of the local election. This local election is going to be one of its kind for a number of different reasons. First, we are having a local election after an interval of about 20 years. Second, this local election will provide many people the first opportunity to vote after the promulgation of the constitution. Third, this local election is all set to elect local representatives who have redefined roles to play. And finally, there are a couple of new candidates from newly established political parties and many are keeping their actions and words in close observation.

One such candidate who is under keen scrutiny of all pundits is Kishore Thapa, especially because he is hailed as an expert of urban planning. Therefore, it is quite natural for people to want to listen to him talk about his vision and his plans. Quite naturally, when one is so closely monitored, the experts will have the luxury to take a microscopic look at each and every statement he makes, and action he performs. In course of his election campaign Sajha Party mayoral candidate Thapa emphasized a number of times that he wants to transform Kathmandu into a beautiful city which emanates the glory of Newari arts and culture. In due course of explaining his ideas, he has given powerful speeches where he has explained about his plans. In one such speech, as reported by convenor of his party Rabindra Mishra, he reportedly said that he will decrease taxes on electric vehicles to make Kathmandu free from smoke.

Taking a cue from Thapa’s statement as reported by Mishra, Rameshore Khanal, a renowned economist and ex-secretary at the Finance Ministry asked Mishra to explain how can the mayor of Kathmandu decrease taxes on electric vehicles when customs, VAT, and road taxes are all collected by the central government. He even suggested that the mayoral candidate from Sajha Party should abstain from such unsupportable statements.

Mishra and Thapa, most probably, must be tired after long days of election campaign, so let me explain or try to explain why Thapa must have said what he said about decreasing tax on electric vehicles. The simple answer for this is because he must have read the constitution of Nepal. To be more specific he must have re-read and appreciated especially certain sections of the constitution related to Schedule 8.

Schedule 8 of the constitution of Nepal is concerned with the List of Powers\Jurisdiction for the Local Level. Number 4 of the Schedule mentions “vehicle tax” within the jurisdiction of the local level. At the same time article 57(4) mentions that in regard to the list included in Schedule 8, the local level has the rights to formulate laws to the extent that they do not contradict the federal laws or the constitution.

Likewise, article 221(2) states that the village assembly and the municipal assembly shall have the legislative power regarding the list enumerated in Schedule 8. It is simply yet another way of restating that the local level can formulate laws regarding vehicle tax.  

If the two aforementioned articles are not clear, article 226(1) is direct in explaining that the Village and Municipal Assembly shall make necessary laws on the subjects mentioned in the list of competencies of the local level pursuant to Schedule 8.

That was all what Thapa had based “tax deduction on electric vehicle” plan on. Sadly some people misunderstood it. Khanal is correct in saying that VAT, road tax and customs are all taxes to be collected by the central government, but he simply failed to see that Thapa hadn’t said otherwise. He was simply talking about the vehicle tax that could be collected locally as per Schedule 8.   Hopefully, this clarifies that the local level has the right to levy vehicle tax and at the same time if a mayor can convince the Municipal Assembly he or she can certainly be instrumental in formulating laws that tends to be lenient toward electric vehicles in regard to local taxes. Therefore it would be wise to vote for a guy who understands local problems and has got plans to make your village or city beautiful again!