KATHMANDU: Independent Power Producers’ Association Nepal (IPPAN) has asked the local government units not to impose any new tax on the hydropower projects before the government formulated clear laws of taxation on this sector in the federal setup.
The association has said that any new tax, in addition to the royalty that they are paying at the moment, would only complicate things before there was a clear government policy.
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The appeal from the professional body of hydropower plant developers came after a local unit in Dolakha decided to levy Rs 1 million from Nepal Developer Limited (Charnawati Hydropower Project).
The village council of Shailung Rural Municipality had decided to impose ‘electricity tax’ on the company, on February 1.
IPPAN in a press statement on Monday has asked not to overburden the hydropower companies until the government came up with clear law in this matter.
Currently hydropower plants are paying an average 10 percent of the total revenue in royalty every year and additional 15 percent of tax to the government.
Twenty-five percent of such royalty is allotted for the local levels, according to the law. But the distribution of such royalty has not started yet, even after the country has embraced federal set up.
IPPAN’s president Shailendra Guragain said that they are already paying royalty worth up to 25 percent of the total annual revenue during the license period of 35 years.
“They should not impose such tax until the law is endorsed by the central government on distribution of the royalty,” added Guragain.
Spokesperson for the Ministry of Energy, Dinesh Ghimire, said that the local levels can impose tax by making laws but not arbitrarily as Shailung Rural Municipality has done.
