The Nepal Chamber of Commerce (NCC) has expressed displeasure over the upward revision of tax rate on vehicles by the Kathmandu Metropolitan City (KMC).

A meeting of the municipal council of KMC last week had approved Financial Bill which has doubled the vehicle tax.

With this, the tax rate for motorcycle and scooters has now been fixed at Rs400 per year, up from Rs200. The rate for car, jeep, van, tempo and tractor has been set at Rs1,000,  with the rate for mini bus, mini tuck being set at Rs2,000. Buses and trucks will have to pay Rs3,000, and earthmovers Rs4,000. The metropolis has extended a 50 percent discount on tax to vehicles that are used for agricultural purpose and electric vehicles.

“The KMC’s decision to hike tax and other fees for implementing the newly introduced Financial Bill is unacceptable,” the NCC said in a statement. The NCC has suggested the KMC form a revenue consultation committee for identifying revenue sources, limit and appropriate rates based on the jurisdiction of the local level authority as well as legal premises set by the constitution.

The country’s constitution has given rights to the local bodies to collect several taxes, including property tax, rent tax (house), real estate registration fees, vehicle tax, advertisement tax, business tax, tourism fee, service tax and entertainment tax, based on which the amendment has been made.

As per the provision set by the government, the consultation committee, headed by the KMC deputy mayor, also comprises a member of NCC. “The decision of making tax revision has been done without forming consultation committee,” the NCC said.

The private sector body has threatened to launch a protest if the KMC enforced the revised tax rates without addressing its demand.