The government's hope to boost its revenue by taxing nearly 4,000 vehicles parked in different customs yards without clearance is being dashed with auto importers continuing to ignore the government’s call to clear their imports. Automobiles are among the highest revenue-generating imports for the government. The government expects to generate as much as Rs 8 billion once the vehicles parked at the customs yards are cleared. “We have estimated to earn Rs 7-8 billion if the imports are cleared by our customs offices,” said a senior official at the Department of Customs (DoC). “It would be a big relief for the government which is struggling to collect revenue as targeted.” The vehicles were imported based on letters of credit issued before last year's import ban, and have continued to remain parked at customs yards. Officials said the importers have not yet made any efforts to clear these vehicles even though the budget for the next fiscal year 2023/24 has already been presented on May 29.

There have not been any changes in taxation on imports of fuel-based vehicles. “If the duty was hiked, those who haven't cleared their imports might have to pay more to clear the parked vehicles,” the DoC official said.

However, automobile dealers said that they were forced to keep the imported vehicles at the customs yards due to the lack of demand in the market and also because of lack of bank loans for auto dealers and customers as well. Anup Baral, Managing Director of Narayani Auto Business said that the dealers could not clear the vehicles parked at customs yards because of around 80 percent slump in demands in the market, lack of availability of working capital, and high-interest rates. “Many auto dealers don’t have money to pay the high import duties at the moment,” he said. He however said that some auto dealers have started to clear a limited number of vehicles parked at the customs yards and making fresh imports lately in line with the current market demand. “People’s growing preference for electric vehicles also contributed to a decline in demand for fuel-based vehicles,” Baral added. Before the budget presentation, the customs department didn’t want to pressurize the automobile dealers to clear these vehicles in customs. “It is because we didn't want to give the impression that something is happening on the tariff to be charged on imported vehicles before the budget,” the customs official said. “Now, we plan to ask them to bring the vehicles in after completing the customs clearance process.” Auto imports declined since the government imposed a complete ban on their imports in April 2022 amid depleting foreign exchange reserves that created fear that the country would head in the direction of the Sri Lankan economic crisis. Even though the government lifted a ban on the import of vehicles among others in mid-December last year and removed all import restriction measures in January, there has not been a substantial rise in imports of automobiles. Since the import ban was lifted, Nepal imported automobiles and their parts worth around Rs 18 billion till mid-May of this fiscal year, according to the Trade and Export Promotion Centre (TEPC). Overall imports of automobiles and parts till mid-May stood at Rs 41.27 billion, according to TEPC. During the first 10 months of the last fiscal 2021/22, Nepal imported vehicles and their parts worth Rs 86.80 billion. With auto imports slumping, it has badly affected the government revenue. With just a month and 10 days remaining before the current fiscal year ends, the government has been able to collect just over 50 percent of the annual target, according to the customs department. “DoC had an annual target of collecting Rs 668 billion but it has so far collected only Rs 342 billion,” the DoC official said.