Nepal’s fiscal system faces challenges including limited revenue mobilization, inefficient tax administration, and regional disparities in resource allocation. Sustainable economic development requires reforms that balance efficiency, equity, and transparency.
First, broadening the tax base and improving compliance are critical. Digital taxation systems, simplified procedures, and robust auditing mechanisms reduce leakages and increase revenue collection. Second, decentralizing fiscal powers allows local governments to manage funds effectively, aligning expenditure with community priorities.
Third, public expenditure must be strategic. Prioritizing education, health, infrastructure, and social protection ensures resources create long-term value. Performance-based budgeting and rigorous monitoring increase efficiency and accountability.
Finally, integrating fiscal policy with development strategy strengthens outcomes. Linking infrastructure investment with job creation, climate resilience, and industrial promotion fosters inclusive growth. With these reforms, Nepal can create a sustainable fiscal framework that underpins broad-based economic development while maintaining stability and equity.