Kathmandu, June 29: The House of Representatives (HoR) has passed the Finance Act 2025, enabling the government to implement tax provisions outlined in the new budget. A majority vote on Saturday endorsed the Act, while rejecting all proposed amendments to the Fiscal Year 2025/26 tax policies.

Finance Minister Bishnu Prasad Paudel said the Act prioritizes expanding the tax base, curbing revenue leakages, and including informal businesses within the tax net. He emphasized that investor interests were considered in revising tax rates, while maintaining revenue policy stability.

The government raised pigouvian taxes on alcohol and tobacco, citing public health concerns, and imposed an additional two percent luxury tax on gold and silver jewelry. These hikes triggered protests from traders, but Paudel dismissed the objections as routine, stating that tax changes were proposed only where necessary.

Earlier, lawmakers had urged reforms to support domestic production, including scrapping green tax, properly enforcing pollution taxes, removing luxury tax on jewelry, and making the tax system more progressive to target high-income earners.

MP Prabhu Sah highlighted ongoing revenue misappropriation despite broader tax coverage, while Madhav Sapkota criticized the government for burdening the public without ensuring social responsibility.