Kathmandu Metropolitan City (KMC), the federal capital of Nepal, has announced an ambitious budget and policy package for the upcoming fiscal year 2083/84, introducing tax revisions, new public service programs, healthcare expansion, and infrastructure investment.

Presenting the annual budget on Thursday, Acting Mayor Sunita Dangol announced several policy reforms, including adjustments to rental income tax rates and incentives aimed at improving tax compliance.

One of the major changes is in rental tax policy. Under the new arrangement, residential properties generating annual rental income below Rs. 240,000 will continue to be taxed at 5 percent, while residential rental income exceeding that threshold will now be taxed at 7 percent, reduced from the previous 10 percent rate.

To expand the tax base and encourage compliance, KMC has introduced additional incentives. Taxpayers who come into the tax system and pay taxes by the end of Ashoj will receive a 10 percent discount, while those clearing outstanding dues within the same deadline will be eligible for penalty waivers.

The metropolitan office also announced measures to strengthen public trust in taxation by making selected recommendation service fees free and expanding cooperation with experts and stakeholder institutions to improve tax analysis and broaden taxpayer participation.

Citizenship and National ID Services to Reach Households

Beginning next fiscal year, Kathmandu Metropolitan City plans to introduce door-to-door citizenship and national identity card services, aiming to improve public access to government documentation.

The city also announced a youth-focused self-employment program, allocating Rs. 10 crore to support employment and entrepreneurship opportunities.

Additional social initiatives include funding for a memorial dedicated to martyrs and fallen police personnel.

Kathmandu Metropolitan Hospital to Be Built

Among the major healthcare announcements, KMC revealed plans to construct its own Metropolitan Hospital under a multi-year development model. For the first year of construction, Rs. 4 crore has been allocated.

The budget also includes:

Community-level yoga programs across neighborhoods.
Rs. 1 crore allocated for pneumonia vaccination for senior citizens.
Special programs targeting diagnosis and management of serious illnesses including cancer.
Rs. 2 crore allocated for establishing an integrated healthcare waste management center.
Continuation of the free ambulance service program.
Rs. 50 lakh allocated to initiate legal and administrative groundwork for establishing Swanigah University.
Rs. 16 crore allocated for nutrition allowance programs.

Rs. 25.88 Billion Total Budget Allocation

Kathmandu Metropolitan City has proposed a total budget of Rs. 25.88 billion for FY 2083/84.

Of this:

Rs. 25.13 billion is projected under consolidated fund expenditure.
Rs. 75 crore is estimated under external expenditure obligations.

Revenue sources include:

Rs. 20.18 billion from internal revenue and bank balances.
Rs. 4.93 billion expected from conditional grants, equalization grants, and revenue sharing from federal and provincial governments.
Rs. 1 crore expected through public participation contributions.

Sector-wise allocation includes:

Economic Development: 2.1% (Rs. 54.18 crore)
Social Development: 9.6% (Rs. 2.42 billion)
Infrastructure Development: 61% (Rs. 15.31 billion)
Governance and Cross-sector Programs: Rs. 2.13 billion
Administration and Office Operations: 18.8% (Rs. 4.71 billion)

The budget signals KMC’s focus on infrastructure expansion, healthcare improvement, service accessibility, and strengthening local revenue management in the coming fiscal year.

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