Subnational level finances

The provinces should enlarge their own sources and not depend on fiscal transfers only.

Following Nepal's transformation into a federal structure, it has been around four and three years respectively since the local and provincial levels started working under this system. With regard to financial resources of the subnational levels, we have to look at four aspects in particular. They include tax revenue raising rights, revenue sharing including natural resources, fiscal transfers and borrowings. The constitution provides key revenue-raising headings to the federal government. They include customs duty, excise duty, value-added tax, corporate income tax, individual income tax, tourism fee, passport fee, visa fee and so forth. The provinces have nominal revenue-raising rights. These include land registration fee, motor vehicle tax, entertainment tax, advertisement tax, agro income tax and others. The local level collects local tax (property tax, house rent tax, house land registration fee, vehicle tax), service charge, advertisement tax, business tax, land tax, entertainment tax and others.