KATHMANDU, July 21: The government has withdrawn its decision to impose a 3 percent equity tax on private education and healthcare services, following widespread public criticism.
Prime Minister Balendra Shah announced the decision in a Facebook post on Tuesday, saying the government would not implement the education equity tax and health equity tax "for the time being" after consultations with Finance Minister Dr Swarnim Wagle.
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"The 3 percent equity tax private education and healthcare, if implemented as planned, would impose an additional financial burden on ordinary citizens and cause further public frustration," Shah wrote. "Therefore, following consultations with the finance minister, we have decided not to implement the Education Equity Fee and Health Equity Fee for now."
The government had introduced the tax to mobilize resources for expanding access to quality education and healthcare in remote and underserved areas, supporting Dalit, marginalized and economically disadvantaged children, and broadening health insurance coverage. It also aimed to expand the tax base and strengthen the country's fiscal system.
However, Prime Minister Shah acknowledged that the strong public reaction to the measure prompted the government to reconsider its decision. "The government's serious attention has been drawn by citizens' response to the equity tax," he said, adding that his administration remains committed to listening to public concerns and making policy decisions in the best interests of the people.
Prime Minister Shah said the government would continue pursuing its broader goal of ensuring equitable access to education and healthcare through non-tax measures. He reaffirmed the government's commitment to implementing a policy requiring private hospitals to allocate 10 percent of their beds, and private colleges and universities to reserve 10 percent of their seats, in a transparent and equitable manner for poor and disadvantaged citizens. "The government is always prepared to review, revise and improve any decision if citizens express dissatisfaction," Shah said.
