Unregulated transactions via WeChat Pay

A significant portion of financial transactions by Chinese tourists in Nepal is bypassing the national tax system, raising concerns about lost revenue. Restaurants in Thamel and other areas catering to Chinese tourists often accept payments through WeChat Pay, a China-based digital payment service.  

Although the app uses Nepal’s internet connection, the transactions are processed in China, leaving no record in Nepal’s national accounts. As a result, these transactions are not reflected as foreign income, and the government of Nepal cannot impose taxes on them.  

Moreover, Chinese business operators in Nepal have reportedly used WeChat Pay to repatriate their earnings to China without paying any local taxes. This issue led to a ban on WeChat Pay in Nepal in 2019. However, the ban was lifted in 2020 after the Nepal Rastra Bank (NRB) granted the app permission to operate within the country.  

Despite regulatory approval, the problem persists, with substantial amounts of money being transacted through the app by evading Nepal’s tax system. Experts and officials are now urging stricter monitoring and enforcement to ensure that such digital transactions contribute to the national economy.