Kathmandu-A major irregularity has emerged involving Cimex Inc., the authorised distributor of BYD vehicles in Nepal, appeared to have received advance information about upcoming tax increases before the national budget was announced.

According to customs data, Cimex cleared 1,396 BYD electric vehicles through customs in the month before the budget announcement. As a result, the government is estimated to have lost Rs 1.027 billion in potential tax revenue that would have been collected under the new tax regime introduced in the budget.

The incident points to serious lapses within both the revenue and customs administrations. Had the same vehicles been cleared after the budget came into effect, the government would have collected an additional Rs 1.027 billion in taxes.

In May alone, Cimex imported 1,396 electric vehicles through the Mustang and Rasuwagadhi border points, the highest monthly volume since the company began selling BYD vehicles in Nepal. The imports consisted of:

• 840 BYD Atto 2 units

• 409 BYD Atto 1 units

• 145 BYD Sealion 7 units

• 2 BYD Atto 3 units

Tax Structure Changed in Budget 2026/27

Under the previous fiscal year's budget, taxes on electric vehicles were determined based on motor peak power. The new budget, presented by Finance Minister Swarnim Wagle on May 29, shifted the taxation system to a value based structure.

The government abolished excise duty on EVs and introduced:

• 20 percent customs duty on all EVs

• Clean Infrastructure Investment Fee based on vehicle value

• Road maintenance charge

• 13 percent VAT

Under the previous system:

• EVs up to 50 kW paid 15 percent customs duty, 5 percent excise duty, and 5 percent road maintenance charge.

• EVs between 50 kW and 100 kW paid 20 percent customs duty, 15 percent excise duty, and 5 percent road maintenance charge.

Under the new system:

• All EVs pay 20 percent customs duty.

• EVs with CIF value up to Rs 2 million pay 2.5 percent infrastructure fee and 2.5 percent road maintenance charge.

• EVs valued between Rs 2 million and Rs 3 million pay 20 percent infrastructure fee and 5 percent road maintenance charge.

• EVs valued between Rs 3 million and Rs 4 million pay 35 percent infrastructure fee and 5 percent road maintenance charge.

• EVs valued between Rs 4 million and Rs 5 million pay 90 percent infrastructure fee and 5 percent road maintenance charge.

Revenue Loss by Model

BYD Sealion 7

Cimex imported 145 Sealion 7 vehicles in May.

• CIF value per vehicle: 190,425 Chinese yuan

• Equivalent in Nepali currency: Rs 4.285 million

Under the new tax regime, the landed cost rises to Rs 11.59 million per vehicle.

Under the old tax regime, the landed cost was Rs 6.98 million per vehicle.

Difference per vehicle:

• Rs 4.61 million

Total estimated revenue loss from 145 units:

• Rs 668.56 million

BYD Atto 2

Cimex imported 840 Atto 2 vehicles.

• CIF value per vehicle: 109,061 yuan

• Equivalent in Nepali currency: Rs 2.454 million

Under the new tax regime:

• Landed cost: Rs 4.171 million

Under the old tax regime:

• Landed cost: Rs 4.018 million

Difference per vehicle:

• Rs 153,488

Total estimated revenue loss from 840 units:

• Rs 128.93 million

BYD Atto 1

Cimex imported 409 Atto 1 vehicles.

• CIF value per vehicle: 89,991 yuan

• Equivalent in Nepali currency: Rs 2.025 million

Under the new tax regime:

• Landed cost: Rs 3.46 million

Under the old tax regime:

• Landed cost: Rs 2.901 million

Difference per vehicle:

• Rs 558,567

Total estimated revenue loss from 409 units:

• Rs 228.45 million

BYD Atto 3

Only two Atto 3 vehicles were imported in May.

Estimated revenue loss under the new versus old tax rates:

• Rs 1.24 million

Total Estimated Tax Loss

Combining all four models, the estimated revenue forgone by the government amounts to:

• Rs 1.027 billion

Additional VAT Loss on Dealer Profit

The landed cost calculations above do not include the dealer's profit margin.

If Cimex applied a profit margin of Rs 500,000 per vehicle on all 1,396 imported vehicles:

• Total profit margin: Rs 698 million

Since VAT of 13 percent is levied on the selling price, including profit, the government would also have collected:

• Approximately Rs 90.7 million in additional VAT revenue

Therefore, the total fiscal impact, including the VAT component on dealer profits, could exceed Rs 1.11 billion.