Foreign companies like Google and Facebook are being taxed. Here is how.

The budget announcement of 2022/23 mentioned the government was imposing a tax on foreign companies like Google and Facebook. Then finance minister Janardan Sharma in the announcement said the government was levying an electronic service tax which would be charged at the rate of two per cent on the transaction value of electronic services provided to consumers by non-residents.

Along with the provision of digital service tax in the Economic Act 2022 , the law was changed to impose value-added tax on it as well. However, it was not so easy to tax foreign companies in Nepal which are established abroad. The initial efforts made by the Inland Revenue Department to make them pay taxes in Nepal did not bear fruit.