KATHMANDU: The Supreme Court has issued an interim order directing that the government’s decision to grant tax exemption to Dolma Impact Fund (DIF) not be implemented, stating that such a decision would cause irreparable loss to state revenue.

A joint bench of Justices Mahesh Sharma Paudel and Balkrishna Dhakal, in its order dated 11 February , continued the short-term interim order issued on 8 January this year.

On the proposal of Finance Minister Rameshore Prasad Khanal, the government had decided to grant income tax exemption to DIF, a company that brought investment into Nepal through a shell company registered in the tax haven country of Mauritius. The government had granted tax exemption to DIF, which has invested in 16 companies in Nepal.

Claiming that the government’s decision would cause loss to the state, Bhesh Raj Luintel had filed a writ petition at the Supreme Court.

The apex court stated in its order that the decision made by the Director General of the Inland Revenue Department (IRD) was contrary to law and that DIF could not be exempted from capital gains tax; rather, tax must be levied in accordance with prevailing laws.

On 14 October 2025, the IRD had decided that Dolma Impact Fund would not be required to deduct tax on capital gains earned from the sale of shares invested in Nepal.

“The decision intended to be communicated to CDS and Clearing Limited shall not be implemented until the final disposal of the writ petition,” the Supreme Court said in its order. “No approval shall be granted to transfer any amount abroad without paying and settling the tax required under prevailing law.”