Save 10% VAT by Paying with Cards & Mobile Wallets in Restaurants and Bars in Nepal

The Inland Revenue Department (IRD) has introduced a new initiative aimed at promoting cashless transactions by offering a 10% VAT rebate for customers making electronic payments in hotels, restaurants, and bars. This scheme encourages businesses to adopt digital payment methods such as debit cards, credit cards, QR codes, and mobile payments.

As of now, the IRD has not specified which mobile wallets and online payment systems will be available for this scheme, as it has only been proposed to the government. If approved, we can get a 10% rebate on electronic payments through platforms like eSewa, Khalti, and FonePay.

Under the program, customers paying through these electronic channels will receive 10% of the VAT they paid back into their bank accounts, provided that the businesses are VAT-registered and issue IRD-approved electronic invoices. This move is a crucial part of the government's plan to encourage tax compliance and promote digital payments in Nepal.

To benefit from the scheme, eligible businesses must update their systems to facilitate VAT refunds and ensure they notify customers of this feature. Online payment gateways and financial institutions are also required to adjust their platforms in line with the updated Electronic Billing Work Procedure 2072 (Revised).

This initiative stems from the government’s budget plan for Fiscal Year 2019/20, which outlined the transition toward a more cashless economy, with the rebate program playing a pivotal role in this effort.