Latest Tax Stamp and Traceability Developments in Nepal

Nepal has been using excise stamps (hereinafter referred to as tax stamps) for more than two decades now, with the stamps effectively contributing to government tax revenue. Indeed, every year, the Nepalese government generates 57 billion Nepalese rupees ($477 million) from excise duty, value-added tax, and health hazard tax imposed on cigarettes and alcohol.

One could say that the last two years have been challenging for the Nepalese tax authority, not because of counterfeiting or other forms of illicit trade, but because of a number of procurement issues, which could, in fact, serve as important lessons for other tax stamp providers across the globe.

September 2019

It all started in September 2019, when the Inland Revenue Department (IRD) – the body responsible for tax stamps – invited international competitive bidding for the provision of 7.8 billion tax stamps with 41 different variants. Within just a few days of issuing the invitation, the IRD was confronted with a legal challenge, when the country’s Supreme Court imposed a stay order on the procurement process in response to a written petition calling for domestic printers to be able to participate in the bidding.