Nepal: Tax refund approval gap widens as only 21 percent of claims pass

The difference between tax refund claims and the amount approved by the government is expanding. In the last fiscal year, taxpayers claimed Rs 23.4 billion in refunds, but only Rs 4.84 billion—about 21 percent—was approved. In previous years, approval rates reached as high as 80 percent. Businesses argue that despite legal improvements, the process has become more difficult, with the IRD demanding excessive documentation, particularly for VAT credits in the construction sector.