Business Owners in Nepal Struggle With High Taxes and Economic Slowdown

Nepali businesses are struggling to survive as the economy faces low consumer demand, high inflation, and increased taxation. Many small business owners report that the new tax policies are making it harder to operate, with some forced to shut down or downsize.

One such business owner is Sita Dhakal, who runs a clothing store in Kathmandu’s New Road. “Before COVID-19, our sales were good, but now, with high VAT, customs duties, and slow foot traffic, it’s becoming impossible to sustain the business,” she said.
Other major concerns include:

• Lack of access to credit: With high interest rates, many businesses struggle to get loans for expansion.
• Slow government approvals: Businesses report delays in licenses, import permits, and export clearances, which affect their supply chains.
• Growing competition from India and China: Many Nepali manufacturers struggle to compete with cheaper imports from neighboring countries.

The Nepal Chamber of Commerce has called for tax relief measures and lower interest rates to help small businesses recover. Without government intervention, many worry that unemployment could rise further, worsening economic stagnation.