In order to widen the tax net, the government is preparing to introduce inheritance tax.

As per the existing laws, inheritance of property till three generations does not require any tax except service charge. The government is currently discussing the prospect of imposing inheritance tax to increase government revenue.

“The Ministry of Finance is holding discussions regarding inheritance tax,” said Finance Minister Yubaraj Khatiwada while speaking at an interaction held at Nepal Chamber of Commerce.

“This discussion is in the initial phase. The final decision will be taken by the Revenue Board,” he added.


The finance minister clarified that inheritance tax is prevalent in many countries and Nepal is also mulling to introduce such tax. Britain, USA, Japan and various other countries impose hefty inheritance tax.

The ministry is discussing categorizing property into various categories before imposing inheritance tax. A source at the ministry said that property of low value will not require inheritance tax while the concept of inheritance tax might be applicable for valuable property.


Authorities are discussing options for those who cannot pay tax while inheriting property. For such case, the government is discussing whether to sell the property to pay tax or to keep it as collateral in bank and pay the tax.

The government had earlier formed the Revenue Advisory Committee to explore different sources of revenue collection. The committee’s responsibilities will be undertaken by the Revenue Board, soon after its formation. The government had announced  in the budget of the current fiscal year that it would hand over full authority to seek new avenues of revenue collection.

Economists have backed the concept of inheritance tax. According to economist Keshab Acharya, the government should fix the inheritance tax rate as per the category of the property. He said that it would be wise to introduce such tax for different classes of society one by one instead of imposing it for all at once.


“Some people are living luxurious life just because they enjoy inherited property. They hardly work for their living. This trend should be stopped,” said Acharya.

Acharya is of the view that inheritance tax would help in reducing economic disparity among different groups of people.

source: new business age, 1 september 2019