Finance Minister Swarnim Wagle has defended the government's decision to impose a 3% Education Equity Fee on private school tuition and VAT on electricity bills, saying the measures are aimed at promoting social justice and strengthening national infrastructure rather than burdening the middle class.
Speaking at a press conference following criticism of the new taxes introduced through the Economic Bill for FY 2083/84, Wagle argued that the additional cost for most households would be minimal while generating significant benefits for disadvantaged communities.
Education Equity Fee for Social Inclusion
According to the Finance Minister, the 3% Education Equity Fee is a progressive measure under which those paying higher school fees contribute more, while families paying lower fees face only a small increase.
He explained that a parent paying Rs. 2,000 per month in school fees would pay only Rs. 60 extra, with the collected funds being directed toward nutrition and welfare programs for children from disadvantaged communities, particularly Dalit children in remote districts such as Jajarkot, Dailekh, and Mugu.
Wagle said the fee is part of the government's effort to reduce inequality and improve educational opportunities across the country.
Improving Public Education
The minister also stated that the government aims to strengthen community schools and improve their quality so that parents increasingly view public schools as a viable alternative to private institutions.
He highlighted recent improvements in public schools in Kathmandu and noted that the government has allocated resources for infrastructure assessments and upgrades in schools nationwide.
Electricity VAT to Support Energy Infrastructure
Addressing concerns over VAT on electricity, Wagle said the actual financial impact on most households would be relatively small.
Because the first 50 units of electricity remain free, he explained that households consuming between 51 and 150 units per month would see an increase of roughly Rs. 24, while those consuming 151 to 250 units would generally pay between Rs. 25 and Rs. 100 more per month.
He argued that the revenue is needed to support major investments in electricity generation, transmission, and distribution systems as Nepal's demand for power continues to grow.
Long-Term Investment Strategy
Wagle said the government has allocated over Rs. 85 billion to the energy sector and emphasized the need to upgrade transformers, transmission lines, and other infrastructure to support electric vehicles, induction cooking, and broader electrification.
He added that Nepal's energy sector remains subject to regulation through the Electricity Regulatory Commission and that returns from state-owned hydropower projects ultimately benefit the public.
Concluding his remarks, the Finance Minister described the new measures as part of a broader shift toward funding social welfare and infrastructure development while maintaining relief for taxpayers through other reforms in the budget.
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