Nepali Bollywood star Manisha Koirala, actor comedian duo Haribansha Acharya and Madan Krishna Shrestha are among prominent public figures who have urged Prime Minister K P Oli to reconsider his government’s decision in the budget to increase by up to five times the tax on imported electric vehicles.
Koirala signed the appeal from her hotel room in Kathmandu where she is in quarantine after returning from India overland last week, and she is among 17 who issued a statement on World Environment Day on Friday.
‘We are shocked with this U-turn in government policy that goes against the desire of the Nepali people to breathe clean air and counter to the global trend towards sustainable transport’ the statement says. ‘This latest provision in the budget has also disheartened the business sector and the international community which had praised Nepal’s effort to promote renewable energy.’
The other signatories to the appeal are environmentalists Tirtha Bahadur Shrestha and Bhushan Tuladhar, former chief of the Nepal Army Gaurav SJB Rana, folk rock musician Amrit Gurung, and former Under Secretary General of the United Nations Kul Chandra Gautam.
Finance Minister Yubaraj Khatiwada’s announcement to increase taxes on electric vehicles five-fold has also been widely condemned on social media and by opposition politicians in Parliament for taking a business-as-usual approach as the country reels from the impact of the pandemic and the lockdown.
Critics have also accused the government of backing down from earlier commitments to promote clean energy at a time when electricity supply has outstripped demand and resulted in wastage of power. Presented to Prime Minister on World Environment Day, the memorandum stresses on the importance of electric energy in ‘approaching with a new outlook economic activities and uplifting livelihoods post COVID-19’.
With hiked excise duties and customs fees expected to double the costs of electric vehicles the signatories say they fear that potential e-car customers will shift over to diesel and petrol vehicles. Nepalis bought more than 800 electric vehicles in the past fiscal year.
‘This will have the immediate impact of reversing improved air quality as a result of the lockdown,” the statement adds. ‘In addition, reliance on imported fuel, already accounting for Rs200 billion in cost will increase, while wasting surplus hydroelectricity.”
Years of policies and aims building up to an emission-free economy have also been reversed by the recent announcement. The decision contravenes the government’s commitments to electrify transportation and reduce carbon emissions laid out in the Nationally Determined Contribution and the National Action Plan for Electric Mobility 2017. Part of this was an aim to electrify 20% of Nepal’s transportation sector by 2020.
The statement raises questions over the government’s reasoning behind the tax hikes. Finance Minister Khatiwada stated that only wealthier sections of the population were benefitting from the subsidies and tax breaks on electric vehicles. However, the signatories said the same demographic purchasing fuel-based cars was switching to electric cars so there was no nett increase in foreign currency outflow.
Similarly, the theory that subsidised e-vehicles were costing the state substantial tax revenue was also debunked. Studies quoted by the statement say that even at pre-tax hike rates, the number of electric cars imported would not have affected revenue collection significantly and the vehicles would reduce petroleum imports and increase consumption of domestically produced electricity.
The appeal states: ‘We demand an immediate withdrawal of the tax hike that will discourage investment and consumption of hydroelectricity and the growth in battery-powered transport.’
Other signatories to the appeal include public health specialist Rita Thapa, anthopologist Sumitra Manandhar Gurung, Gaurishankar Lal Das, physican Arjun Karki, academic Damber Chemjong, Suman Sharma, Suman Basnet and editors Kanak Mani Dixit and Rajendra Dahal.