The Government of Nepal has introduced significant tax hikes on tobacco and vapor products through the Economic Bill for the upcoming fiscal year 2083/84. Presented in Kathmandu, the policy aims to actively discourage tobacco consumption while simultaneously driving national revenue growth.
Under the new bill, electronic cigarettes (vapes) and transdermal nicotine patches face a steep 15% tax increase, raising the excise duty rate from 40% to 55%. Traditional tobacco products, including cigarettes, cigars, hookah flavors, and rural bidis, will also see immediate price increases in the market.
| Product Category | Previous Tax Rate (FY 2082) | New Tax Rate (FY 2083/84) |
|---|---|---|
| Electronic Cigarettes (Vapes) | 40% | 55% |
| Cigarettes (up to 70 mm) | Rs 1,792 / 1,000 sticks | Rs 1,845 / 1,000 sticks |
| Cigarettes (above 85 mm) | Rs 4,410 / 1,000 sticks | Rs 4,578 / 1,000 sticks |
| Cigars & Cigarillos | Rs 31 / stick | Rs 35 / stick |
| Khaini, Gutkha & Jarda | Rs 880 / kg | Rs 900 / kg |
| Hookah Flavor | Rs 1,500 / kg | Rs 1,600 / kg |
| Bidis (Prepared) | Rs 96 / 1,000 sticks | Rs 100 / 1,000 sticks |
While the government has aggressively targeted processed and manufactured tobacco products, it has maintained a protective stance on raw agricultural inputs. The excise duty on raw tobacco and tobacco residue remains unchanged at last year’s rate of Rs 130 per kg.