KATHMANDU: Gold and silver traders in Nepal have suspended their month-long protest following a six-point agreement with the government.

According to the Federation of Nepal Gold and Silver Dealers’ Association, shops will reopen from Friday.

The government had introduced a 2% luxury tax on gold and a 13% VAT on diamond-studded jewelry in the budget for fiscal year 2025/26, prompting widespread opposition.

Traders argued the taxes harmed both consumers and businesses, leading to market shutdowns and disruption in price-setting.

As per the agreement, a joint task force will be formed to study the tax issues, and the proposed luxury tax and VAT will not be enforced until the task force submits its report.

The study will also review whether gold qualifies as a luxury item. Other agreements include improving the distribution mechanism, easing access to gold and gemstones, and amending the 2011 regulations on gold import and sales.

Representatives from the Ministry of Finance, Ministry of Industry, Inland Revenue Department, Customs Department, Nepal Rastra Bank, and business federations signed the agreement.

The task force secretariat will be based in the Revenue Management Division of the Finance Ministry.

Key government signatories include Finance Ministry’s Uttarkumar Khatri, Industry Ministry’s Bipin Acharya, and NRB’s Rajendra Bhattarai, among others.