KATHMANDU: Deputy Prime Minister and Finance Minister Bishnu Prasad Poudel has clarified that the recently enforced luxury tax on gold transactions is aimed at enhancing transparency and helping Nepal exit the Financial Action Task Force (FATF) grey list.

Speaking at Wednesday’s National Assembly meeting in response to questions raised over the Finance Ministry’s appropriation bill, Minister Poudel explained that the government has not introduced a new luxury tax but has removed the previous exemption threshold.

Previously, transactions involving more than Rs 1 million worth of gold were subject to the luxury tax. That limit has now been lifted to improve regulatory oversight.

Poudel said that the upcoming fiscal year’s budget was formulated in light of the country’s current economic conditions. Addressing concerns about deficit financing, he noted that borrowing during budget formulation is a common practice not only in Nepal but globally.

“Revenue and international assistance are key sources of funding, but we haven’t yet reached a point where we can rely on them alone. Borrowing remains necessary, but we are cautious not to let debt levels become unsustainable,” he stated.

The minister emphasized that the budget adheres to democratic principles and expressed confidence that it would contribute positively to Nepal’s overall development.