Kulman Ghising Criticizes Government’s Plan to Raise VAT Instead of Reducing Electricity Charges

May 5, Kathmandu. Kulman Ghising, chairman of the Ujyalo Nepal Party, has accused the government of planning to increase inflation by imposing additional VAT at a time when electricity charges should be reduced. Ghising made these remarks while addressing a program organized by the party’s youth and student wing on Friday.

He recalled that while working at Nepal Electricity Authority (NEA), he had cut electricity charges by three times totaling 25 percent, despite the authority being in deficit. This reduction led to a total loss savings of Rs 2.5 billion.

“Even after reducing electricity charges by Rs 2.5 billion, the authority made a profit. Despite the authority being in deficit, it turned profitable by cutting electricity fees,” he said. Ghising also pointed out that numerous hydropower projects are currently under construction in Nepal, which would make electricity cheaper over time. However, instead of reducing charges in such times, he said the government has taken a contradictory path.

“We have even levied VAT on electricity. In India, there is no VAT on electricity, but the government here imposed 5 percent VAT,” he stated. “This 5 percent VAT will now affect industrial production as well, leading to higher production costs and increased inflation.”

He also criticized the government for increasing taxes on share riding, education, and health sectors, which impacts poor communities. “The budget mainly benefits the upper-middle and higher classes. It does not address the needs of the lower-middle and lower classes,” Ghising elaborated. Despite having a two-thirds majority, the budget has not fulfilled the high expectations of the country and its people, he added.