Nepal has withdrawn the 3 per cent equity tax imposed on the private education and health sectors after widespread public criticism, Prime Minister Balendra Shah said on Tuesday. He said the decision was taken after the proposed levy raised concerns about an additional financial burden on the public.

In a social media post, Shah said that after consultations with Finance Minister Swarnim Wagle, the government had decided not to implement the equity tax on private education and health sectors "for now". The 3 per cent levy had been introduced last month in the budget for the new fiscal year and came into effect from July 17.

Shah said the tax had been introduced to expand the tax base and make the economy more organised. However, he said the government had taken note of the public response and decided to suspend its implementation. The move came after the proposal drew criticism from citizens, the media and political parties.

"This government is people-centred, based on the trust and expectations of the people. Our main goal is to establish good governance and ensure that all citizens experience a quality life," Shah said. He added that the government remained committed to listening to citizens' concerns while pursuing its goal of building an equitable society.

"The reactions from citizens at the grassroots level toward the equity tax have drawn serious attention from the government. Our commitment to moving forward while listening to the people's demands and building an equitable society remains unwavering and clear. All decisions of the government are and will be made with the welfare of the citizens at the centre. If citizens are dissatisfied with any decision, the government will always be ready to revise and amend it," the prime minister said. The government has now put the proposed tax on hold following the backlash.

With PTI Inputs

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Published By:

India Today Web Desk

Published On:

Jul 21, 2026 19:06 IST