It is that time of the year again. The last-minute construction spree is underway to make up for chronic underspending of capital expenditure, right ahead of the new budget to be presented in Parliament on 29 May. The paradox is that while the government faces a severe cash crunch due to falling revenue, it spent only one-third of the development budget in the last 10 months of the fiscal year.&nbsp; The new parties in Parliament like the RSP have been trying to shake things up and urge multi-partisan consultations before the budget, but given the obsolete structure and leadership of the parties, not much is expected to change. But there is a strong argument for tax reform since the government faces a major challenge in balancing revenue with expenditure. The previous government’s ban on luxury items to augment depleting foreign reserves post-pandemic and increased bank interest led to the decline of real estate transactions resulting directly in a drop in revenue. But what makes matters worse is that the government has been profligate in spending beyond its means. Salaries, allowances, administrative expenses, grants and loans have all gone up. The government collected Rs756 billion in revenue in the last 10 months against the target of Rs1.4 trillion whereas its expenditure has exceeded Rs1.04 trillion.&nbsp; Read also: <a href="https://www.nepalitimes.com/editorial/institutionalised-inequality">Institutionalised inequality</a>, Editorial Taxation is the primary source of income for any government. Contrary to what the wealthiest Nepalis think, the government is not run with their tax money but by what ordinary citizens pay in taxes. &nbsp;While tax evasion concentrates the wealth within the already privileged, the tax the poor pay is not proportional to their earnings. &nbsp; Nepal’s liberal economic policy since 1990 was expected to alleviate the income gap with trickle down effect, but the economic disparity in society is more stark than ever. A 2020 report Equality for Prosperity showed that while the wealthiest 20% of Nepalis own 56.2% of wealth, the poor 20% have only 4.1%. This economic gap is likely to have widened with the current crisis.&nbsp; This income gap is not just in Nepal. Worldwide, a skewed tax system is blamed for rising inequality. A new Oxfam report points out that two-thirds of the wealth that has increased globally after the Covid-19 pandemic is in the hands of the richest 1%. It recommends tax reforms based on wealth accumulation. “Because the tax system is not progressive in Nepal, wealth is piling up in the hands of the rich, while the income of the poor is not increasing,” explains economist Dilliraj Khanal. “We don't have a system of taxing the rich because of policy weakness and dominance of middlemen.”&nbsp; Read also: <a href="https://www.nepalitimes.com/opinion/nepals-care-economy">Nepal's care economy</a>, Bina Pradhan  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7.png" data-media-id="editor_2" data-image-id="20230526050528_6fe0c49de563e6fb210c25501e835186d93ecd57b2f63f8ff8154dca49daeee7" data-rendition-name="original" width="741" height="541" loading="lazy" alt="Rich-poor gap graph"> </figure>  Who pays taxes? Two-thirds of the government's annual revenue is collected not from corporations and industry, but from various taxes and revenue paid by the general public. The share of tax on corporate profit is in fact very small.&nbsp; In fiscal year 2021/22, the government collected a total of Rs989.62 billion in revenue. Of this, the income tax paid by businesses from the profits earned through private companies is only 5%. So while income tax did bring in Rs229 billion which is 24% of total revenue collected, this amount is largely from the income tax paid by ordinary citizens on their personal income. The tax paid from the profits of private companies is only Rs47.5 billion. When adding public limited companies (issued shares to the general public) and other types of companies, corporate income tax comes to only about Rs114 billion,which is just 11% of the government’s annual revenue.&nbsp; The government collected Rs314 billion from VAT last year, and this made up about one-third of total government revenue. Similarly, Rs241 billion was collected as customs duty and Rs155 billion as excise. “Society with unequal income and wealth, but equal taxes, burdens the poor and favours the rich, it is a regressive tax system that makes it difficult for the poor to survive,” says Khanal. For example, VAT is the same 13% for all Nepalis – rich and poor. &nbsp; “In essence, five-star hotels in Kathmandu and the poor are both taxed equally for LPG fuel,” he adds. “From a social justice standpoint, taxes must be based on income.” Read also: <a href="https://www.nepalitimes.com/here-now/ground-reality-of-landlessness-in-nepal/" target="_blank">Ground reality of landlessness in Nepal</a>, Rabi Giri Taxation expert Roop Khadka disagrees, saying it is impractical to have a different VAT rate for rich and poor, and even if it was introduced it would be impossible to enforce. Instead, Khadka favours revoking VAT exemption on goods and services consumed by the upper classes, which are worth nearly Rs100 billion per year. Tax evasion by the rich is another problem that needs to be tightened, and collusion between business and politicians means that the government itself abets tax evasion. Real estate speculation has helped select groups in Nepal to become immensely rich immediately, but the government collects a bare minimum in tax from profits made in land transactions. &nbsp; A real estate sale within five years is required to pay 7% of its profit. If the transition happens within 10 years, only 5% of the profit is taxed. This means most of the astronomical profits made in real estate sales in the past years have gone into the pockets of brokers and large landowners. On the other hand, the 60th report of the Auditor General's Office says many evade tax by showing less than the actual value of the property. The VAT bill scandal 10 years ago also revealed the widespread tax evasion by the commercial sector. The politics of patronage means that businesses are now colluding with politicians and bureaucrats to loot the treasury. The Tax Settlement Commission decided to collect Rs9.54 billion from businesses that have not paid tax for a long time, but the Auditor General's Office later revealed that the decision was made in cahoots with the businesses themselves who actually needed to pay Rs30.52 billion. The most egregious and blatant wrongdoing was by former Finance Minister Janardhan Sharma who was making backroom deals with select business groups importing steel rods and electric vehicles so their products got customised tax breaks in the budget last year. The deal cost Sharma his ministership but the unholy nexus between politicians and business continues with impunity.&nbsp; Read also: <a href="https://www.nepalitimes.com/here-now/state-sponsored-economic-crisis-ikcxxmnp">State-sponsored economic crisis</a>, Ramesh Kumar  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b.jpg" data-media-id="editor_5" data-image-id="20230526050528_60a9385914649170d0496b8864bcb751477820b43554c68bec524f6e2412d39b" data-rendition-name="original" width="6124" height="4082" loading="lazy" alt="Kathmandu labourer NT"> <figcaption>Photo: SUMAN NEPALI</figcaption> </figure>  Alternative to the wealth tax In this state, the only sector keeping Nepal’s economy afloat is the estimated $9 billion Nepalis abroad send home every year. Still, Nepal’s debt has reached 43% of GDP, a sharp rise from 28% a decade ago. This will have a direct impact on the tax system. Sooner or later, the government will raise taxes. But for whom?&nbsp; If the status quo continues, and the poor are subjected to more taxes the income gap will widen further, inviting social unrest. Taxation relative to the size of the economy is about 22% in Nepal, one of the highest in South Asia. But for every Rs100 the government receives as revenue, only Rs23 is collected through income tax. The rest is made up of common citizens paying for the consumption of goods and services.&nbsp; All over the world, different levels of income are distinguished and income tax exemption is given to the lowest which is known as a basic exemption. Welfare states also have a weighted system of taxes of the richest that ensures socio-economic equality. But even though there is a flat tax on salary and allowances, windfall profits including from real estate transactions are not taxed properly, leading to a consolidation of wealth among certain groups. Read also: <a href="https://www.nepalitimes.com/banner/nepals-great-income-divide">Nepal's great income divide</a> Experts have proposed wealth-based taxation to reduce the disparity between rich and poor. Economist Keshab Acharya says that the government should levy an inheritance tax on ancestral property to children as is done in the US, Japan and Europe. This encourages entrepreneurship and inspires the new generation to find creative ways to earn money. But the historical distribution of land in Nepal was largely unfair where families close to the ruling class were granted ownership exempt from tax. These assets have been handed down through generations and ownership of a large part of it is still limited to certain families.&nbsp; Historian Mahesh Chandra Regmi in his book Land Ownership in Nepal states that before 1951, more than one-third of the total arable land had been handed down intergenerationally in that manner. An inheritance tax will also reduce corruption because the mentality that wealth should be passed on to children will be weakened if such a tax is implemented. Meanwhile, land prices in Kathmandu skyrocketed thanks to the government. Since the state has spent on infrastructure that led to the rise in value of property, it should get a share of the profits “The government should get the benefit of increased property valuation in the form of taxes which will increase the spending purse for the welfare of the poor,” explains Khanal. Read also: <a href="https://www.nepalitimes.com/?p=21822&amp;preview=true" target="_blank">Some are more equal than others</a>, Anil Chitrakar

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Nepal’s tax system widens rich-poor gap

<img width="1050" height="696" src="https://superdesk-pro-c.s3.amazonaws.com/sd-nepalitimes/20221108101144/636a25c89c7e80680e0439dfjpeg.jpg" alt=""/>The Supreme Court’s verdict on Wednesday requiring the Malaysian company Axiata and Ncell Nepal to pay billions capital gains tax on their purchase of Nepal’s largest private telecom provider Ncell will end a <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/06/03/taxing-time-for-ncell/" target="_blank" rel="noopener">controversy</a> that has dragged on for three years, but is expected to further chill <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Nepal’s foreign investment climate</a>.A full bench of the apex court headed by Chief Justice Cholendra Shumsher Rana decided after two days of hearings that Reynolds Holdings Ltd was a shell company and the real owner of <a href="http://archive.nepalitimes.com/blogs/thebrief/2016/05/16/the-tax-in-question/" target="_blank" rel="noopener">Ncell</a> was <a href="http://archive.nepalitimes.com/blogs/thebrief/2015/12/21/axiata-buys-80-stake-in-ncell/comment-page-1/" target="_blank" rel="noopener">Axiata</a>, and it was liable to pay the tax along with Ncell Nepal.Justices Rana, Mira Khadka, Bishwambhar Prasad Shrestha, Ananda Mohan Bhattarai and Tanka Bahadur Moktan were deliberating on a public interest litigation writ filed by former secretary and advocate Dwarika Nath Dhungel and six others that Ncell Nepal and Axiata were responsible to pay capital gains tax when they bought the company from the <a href="http://archive.nepalitimes.com/article/interview/Nepal-very,1104" target="_blank" rel="noopener">Swedish-Finnish telecom company TeliaSonera</a> in 2016.When TeliaSonera sold Reynolds Holdings shares in Ncell to Axiata for over $1 billion, Nepal’s Large Tax-payers’ Office had said Reynolds owed the government Rs35 billion in taxes and demanded it pay the amount and fines to a total of Rs61 billion.Ncell Nepal refused to pay that full amount, and transferred only Rs21 billion capital gains tax. After this, the writ was filed, and the Supreme Court on Wednesday also rejected a case filed by Ncell.The case became controversial after two foreign investors traded ownership of a Nepal-based telecom company. Since TeliaSonera has already left Nepal, the Court found that the buyer is liable to pay capital gains tax if the seller did not.Senior advocate Surendra Bhandari says that it is international practice that the seller has to pay capital gains tax on any sale of assets, but says the Supreme Court is right in assessing that the seller was allowed to leave the country without paying tax and to put the onus on the buyer.Wednesday decision now sets a precedent for the buyer to also be responsible for paying capital gains tax. Officials at the Internal Revenue Service say that although the country’s treasury will benefit from the tax payment, there has been no investigation into why the seller was allowed to get away without paying taxes, and fears that the case will have negative repercussions on future investment.Eighty percent of Ncell’s ownership is with Reylonds Holding registered in the British Virgin Islands and 20% with Niraj Govinda Shrestha. Ncell’s main promoter was Reynolds Holding through TeliaSonera’s office in Norway.According to Nepal’s tax laws, TeliaSonera’s sale of Ncell to Axiata had a capital gains tax liability of Rs35 billion. Axiata had written to the Internal Revenue Office before the sale if it was liable to pay capital gains tax in Nepal, but there was no reply from its director at the time, Chudamani Sharma.After that the tax controversy got mired in politics, with various party leaders and former CIAA chief <a href="https://archive.nepalitimes.com/regular-columns/Legalese/parliament-and-court-plays,822" target="_blank" rel="noopener">Lokman Singh Karki</a> vying for underhand deals that would let the guilty go free. Says advocate Bhandari: “The Supreme Court decision seems to be driven by the logic that any buyer should first inquire about the liabilities of the seller before any purchase.”However, other retired revenue officials say it is unfair to blame Axiata, and ask it to pay capital gains tax that should have been paid by TeliaSonera. He says the really guilty party here are the politicians who allowed TeliaSonera to leave without paying taxes, and this will dim Nepal’s investment climate just before an Investment Summit planned for next month, and after <a href="https://www.nepalitimes.com/here-now/to-davos-with-hammer-and-sickle/" target="_blank" rel="noopener">Prime Minister KP Oli’s visit to Davos</a> with the message that <a href="https://www.nepalitimes.com/editorial/crony-communism/" target="_blank" rel="noopener">Nepal was open for business</a>.The Surpeme Court verdict has also exposed a loophole in Nepal’s tax laws that allows shell companies to get away without paying taxes. TeliaSonera had its dividends frozen in Nepal by the Large Tax-payers’ Office, but the Supreme Court allowed the company to repatriate its profits.   According to the <a href="https://www.nepalitimes.com/latest/nepalis-in-tax-havens-swiss-banks-money-laundering/" target="_blank" rel="noopener">Nepal Leaks exposes</a> by the Centre for Investigative Journalism and the International Consortium of Investigative Journalists, Ncell owners had used the company to launder money as foreign direct investment. Ajeya Raj Sumargi, a businessman close to the former Maoist party and Birendra Mahato of the Federal Socialist Forum Nepal and brother of billionaire overseas Nepali Upendra Mahato were implicated in documents leaked through the Panama Papers about tax havens.The verdict this week opens the door for Nepal to tax FDI that is coming in from offshore tax havens.   Read also: <a href="https://archive.nepalitimes.com/regular-columns/Comment/making-nepal-fdi-friendly,853" target="_blank" rel="noopener">Making Nepal FDI friendly,</a> Shyamal K Shrestha<a href="http://archive.nepalitimes.com/news.php?id=962#.XFwMylUzaUk" target="_blank" rel="noopener">Fight for FDI</a>, Ashutosh Tiwari<a href="https://archive.nepalitimes.com/article/from-nepali-press/Ncell-has-complied-to-all-obligations,3047" target="_blank" rel="noopener">"Ncell has obliged to all obligations"</a>

Supreme Court weighs in on Ncell tax dispute

This is the 91st episode of Diaspora Diaries, a Nepali Times series in collaboration with Migration Lab providing a platform to share experiences of living, working and studying abroad. I have still not come to terms with the reality that my daughter Ruby Thakur is now the Deputy Speaker of Nepal’s Parliament. Sometimes, when I am walking, the thought hits me, and I cannot believe it.&nbsp; Things changed for my daughter in a very short time. I had dreamt that the best my daughter could achieve was a good engineering job. Fate had bigger plans for her. She is no longer just my daughter, she is the nation’s daughter. Nepal’s daughter.&nbsp; My children’s education was always my foremost priority. That is the main reason I went overseas for employment. I realised the value of education while working in Saudi Arabia. In my office, colleagues with good education earn $8,000 per month working on computers. Those with low education toil outdoors in the heat for much lower wages. A good education or skills can change everything. I am in Nepal on vacation and will soon return to my job. Ruby is all set now. But I still have to take care of my other children's education. As the eldest son, I myself never got a chance to prioritise my own education. I dropped out in Grade 7 because I had to take care of my ageing parents and younger siblings. I have done all kinds of jobs. I worked in a landlord’s field for a share of the harvest. Even now my wife and I farm for the land owner and have to give away half of what we grow.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260413120444_051b61e01a5189af538aa1e011acd3e2b38d5f42825116b2afd325d93d0c519b.jpg" data-media-id="editor_0" data-image-id="20260413120444_051b61e01a5189af538aa1e011acd3e2b38d5f42825116b2afd325d93d0c519b" data-rendition-name="original" width="4032" height="2268" loading="lazy" alt="DD"> <figcaption>Sogarath Thakur during a break in Nepal with wife tending to his farm.</figcaption> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260413120448_8a1c3ac3fd559026bc6f981cc8dc82cb8ad09a3a4f55fb9f6f7fd5f49c3d5571.jpg" data-media-id="editor_1" data-image-id="20260413120448_8a1c3ac3fd559026bc6f981cc8dc82cb8ad09a3a4f55fb9f6f7fd5f49c3d5571" data-rendition-name="original" width="4032" height="2268" loading="lazy" alt="DD"> </figure>  Then I worked as a barber, my family’s line of occupation. I went door to door cutting people’s hair and later worked in a relative’s saloon. Hairstyles were simple back then, and I got to keep half the fee. I also worked in a brick factory where I was paid weekly. &nbsp; I married when I was 16, and my wife was a year younger. As my family and responsibilities grew, I had to migrate leaving behind my three children including Ruby who was just three months old.&nbsp; I went to Qatar where I continued working as a barber. It was a large saloon and the standards for cleanliness and professionalism were higher. I had to hand over 70% of my daily earnings to the employer. I had to rely on my colleague to translate what the customer wanted. But I slowly became fluent in Arabic. I used to jot down words in Nepali and Arabic and memorise them. In Qatar, customers even came at night for haircuts, and people stayed up late. I would work till 3AM.&nbsp; Communicating with my family was one-way. I would go to Bismillah and ask someone to type out questions to my family about their whereabouts, how the harvest was that season. I would offer very little information about my life in Qatar because it was not easy. What was the point of getting them all worried? What could they do? I never received a letter in return, so throughout my time in Qatar, I never knew how my family was faring. When I appeared in the village after five years without any advance notice, it was a bittersweet reunion, and I had no gifts. I still remember how unfamiliar my village felt when I came home after so many years. I had to ask for directions. When I came home, Ruby was already in school. I had left her in my wife’s arms five years prior. I missed her growing up, and did not even see her pictures. My wife had to introduce her to me as her father. But it took just 15 minutes for her to warm up to me.&nbsp; The Arabic skills I had picked up in Qatar came in handy when I remigrated two years later to Saudi Arabia. I worked as a labourer in the desert heat, but once my company found out I spoke Arabic, I was hired for an indoor job as an office boy. The struggle in Qatar had paid off. I worked in an air conditioned office serving tea or coffee, doing bank runs or getting documents signed and photocopied. I have worked in the same company for the past 20 years, sending money home.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260413120448_f083fa873a6d77b19c8b0bdde623415c643a151fb550c57ff4e52b3c2431355f.jpg" data-media-id="editor_2" data-image-id="20260413120448_f083fa873a6d77b19c8b0bdde623415c643a151fb550c57ff4e52b3c2431355f" data-rendition-name="original" width="5712" height="3213" loading="lazy" alt="DD"> </figure>   <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260413120452_5ccd9a01ee05ce26b71381725108215d0f0d3806508b0cb482aabcfea09bbaef.jpg" data-media-id="editor_3" data-image-id="20260413120452_5ccd9a01ee05ce26b71381725108215d0f0d3806508b0cb482aabcfea09bbaef" data-rendition-name="original" width="4032" height="3024" loading="lazy" alt="DD"> </figure>  My wife is not just my children’s guardian, but also mine throughout the two decades I was away. I trust her with all my earnings, and she manages our household finances well. She makes sure that the children’s school fees and other expenses are paid on time. These days, with video calls, things have become much easier for me to stay in touch with home.&nbsp; When Ruby told me she wanted to do an engineering diploma, I was happy. Later, her friends inspired her to join politics so she started getting involved with Shram Sanskriti Party. I first found out she got the proportional representation nomination through social media while on my work duty in Saudi Arabia. I was so excited, but even more so when she was elected Deputy Speaker. I was back home in Dhanusha on my vacation at the time.&nbsp; We are overjoyed and waiting for her to come back to the village for a visit when she gets a chance so we can celebrate properly with everyone. I plan to go back to Saudi Arabia as originally planned, I have a good job and will work for maybe five more years. Ruby has taken 75% of the load off my back. She can help take care of her siblings.&nbsp; I sleep at 8PM every day and wake up at 5AM to exercise before my day in Saudi Arabia begins – I have stuck to the same routine for the last two decades and it has worked well for me and my health. I have a good rapport with my boss who is an Egyptian. My requests to resign have often been met with counter-offers to stay on. My honesty and hard work have won me the company's trust. I will go back and resume working as I have, despite my daughter’s huge achievements. I am still a farmer’s son, a simple man who has to fulfil his family responsibilities. My colleagues in Saudi Arabia are aware that Ruby is Deputy Speaker in Nepal’s Parliament, they are all happy for me and have congratulated me. This time, when I go back, I have promised them that I will throw a bakhri party to celebrate my daughter’s achievement.

The nation’s daughter

At 6 feet and one inch, Hira Bahadur Ghalan was exceptionally tall for a Nepali. In 1936, when people came to his Tamang village near Tistung looking for porters, they recruited him on the spot. This was no ordinary job, Hira Bahadur would lead gangs of 30 or more porters to carry cars bought by Rana rulers from Bhimphedi to Kathmandu.&nbsp; Those were the days when the only motorable roads in Nepal were in Kathmandu, but the capital was not connected to anywhere else by road. So, before cars could carry people, people had to carry cars. More Nepalis had carried cars than ridden in one. The porters were paid Rs5 for the job, and sometimes the Rana owners gave Hira Bahadur a Rs25 baksheesh. One of the cars his community helped carry was a 1939 Daimler Benz gifted by Adolf Hitler to King Tribhuvan to woo Nepal away from the British. The rusted dusty vehicle is now in the Narayanhiti Palace Museum.&nbsp; Hira Bahadur hauled cars for 25 years until his knees gave way, he died at age 90 eight years ago — the last surviving car porters of Nepal from Chitlang Valley.&nbsp; Hira Bahadur Ghalan had three sons and three daughters, one of them is Maila Kaji Lama, who at age 68, is a chauffeur in Kathmandu. His son, Manjil Lama is a pilot with Summit Air, flying to remote Himalayan airstrips. Three generations of one family worked in professions that followed a century of transportation history in Nepal. &nbsp; After the <a href="https://nepalitimes.com/multimedia/the-long-and-winding-road-to-india">Tribhuvan Rajpath was finished in 1957</a> and the ropeway upgraded, Hira Bahadur was out of a job. He tilled the family farm, watching trucks and buses headed to and from Kathmandu on the hairpins.&nbsp; As a child, Maila Kaji was fascinated by cars and wished one day to be able to drive one. After he failed Grade 8, he came to Kathmandu in 1975 and got a Rs20/month job at a petrol station in Maiti Devi. “I watched King Birendra’s coronation and was impressed by the glamour of Kathmandu, and decided to stay here,” Maila Kaji says.  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026041816040_a1a41e47dec8500727702f700e43af625f059043cbcd283f13b247344b3a20aa.png" data-media-id="editor_1" data-image-id="2026041816040_a1a41e47dec8500727702f700e43af625f059043cbcd283f13b247344b3a20aa" data-rendition-name="original" width="1974" height="1608" loading="lazy" alt="car carriers"> <figcaption>Maila Kaji</figcaption> </figure>  Former minister Ramesh Nath Pandey used to bring his Volkswagen Beetle to the station, and Maila Kaji started taking care of his car. Later, he drove a Russian Jeep for former minister and geographer Harka Gurung. Along the way, he fell in love with the daughter of a Brahmin colleague, and married her. “My father back in Tistung did not approve of our inter-ethnic marriage, and not speak to me for five years,” Maila Kaji recalls. Manjil Lama grew up in Kathmandu, and did well in science in school. He had wanted to go the US to become a pilot like his friends, but was denied a visa.&nbsp; “The visa officer told him I did not earn enough,” says Maila Kaji, “so I sold some property and sent Manjil to flying school in the Philippines.”  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/2026041816040_e9091162840baa6d182de2d7cc6f09e43ec9cfd9a9b6e71e7e7b14bc72da3537.png" data-media-id="editor_2" data-image-id="2026041816040_e9091162840baa6d182de2d7cc6f09e43ec9cfd9a9b6e71e7e7b14bc72da3537" data-rendition-name="original" width="1434" height="1754" loading="lazy" alt="car carriers"> <figcaption>Manjil Lama</figcaption> </figure>  After returning to Nepal, Manjil Lama now flies Let 410s of Summit Air to difficult air strips like Lukla and Simkot, and has logged over 2,000 hours. He has to go to the Czech Republic regularly for simulator training. Says Maila Kaji Lama: “My father worked hard carrying cars to raise us, I started from scratch to become a driver to support my family, and my son is now a pilot with experience in flying in the world’s toughest terrain.” &nbsp; Watch <a href="https://www.youtube.com/watch?v=lvT3iTi8yw4" target="_blank">video clip from S Dillon Ripley here</a>.&nbsp;  <figure> <img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260419020448_40f8b1bdaace08106ca5c24819b6e7a34fb2109a9a3ec5c6ac179b3309e686ed.png" data-media-id="editor_4" data-image-id="20260419020448_40f8b1bdaace08106ca5c24819b6e7a34fb2109a9a3ec5c6ac179b3309e686ed" data-rendition-name="original" width="900" height="1582" loading="lazy" alt="car carriers"> </figure>

Grandfather carried cars, son drives cars, grandson flies planes

Nepalis are insured but not covered

The series Nepal Made profiles Nepali products and the people who make them possible. Named after the mythical bird-like creature, GarudX is Nepal’s first precision manufacturer of UAV platforms. They offer a wide range of drone products and services. Last month, GarudX won first place at the US-Nepal Startup Weekend Challenge, a three-day accelerator-style program that gathered 25 of Nepal’s most promising early-stage companies. These include custom drones, cinematography, virtual tours, first-person-view (FPV), drone racing, 3D reconstruction, ground control software, and drone light shows. “I think they liked that we pitched the company as a Drone Enterprise System, as a company providing large-scale, integrated drone services,” says Dipawoli Malla, an AI software engineer with GarudX. The company sees a lot of potential in AI-based aerial computer vision, which is already used for infrastructure planning and land surveys, and could be vital in tracking wildlife poachers and assisting search and rescue during disasters. “Our vision for the company has always been to be the one stop solution for every drone problem,” says GarudX CEO Avash Thapa, who also oversees video production. Drones have gained high profile in the past five years due to their widespread adoption in war. While they do work with the Nepali army, GarudX wants to focus on the idea of drone for good. For Nepal, the potential is great for civilian applications especially because of the country’s terrain. Past efforts have been experimental, like a project to deliver tuberculosis treatment in Piuthan in 2019, and for wildlife censuses in Chitwan. Journalists now regularly use drone footage to get a bird’s-eye view for investigative stories on illegal sand-mining or delays in infrastructure projects. Drones were vital during the GenZ protests last September, in which aerial videos provided clues about what actually happened when the crowd surged towards Parliament. They also captured the dramatic aftermath of the destruction of government buildings featured in this paper. “A lot of people do not know or appreciate that drones are also made in Nepal,” notes Malla. “We export a lot of technology as software. It is a big achievement that we can also export hardware.” GarudX was informally started and active on social media since 2018, and officially registered as GarudX Multipurpose in 2024. Founder and Managing Director Adarsha Raj Bhusal had experience working with robotics and FPV drones when he launched the company, as an engineering group interested in custom-built high-performance aerial robotics. “I design our products,” says Bhusal. “We send designs to China where they are manufactured as individual parts. Costs are low when importing from China. Then we assemble and sell them here. It's a system that works well for us.” Among the UAVs GarudX makes include the Skyreaper, which is a long-range drone with advanced obstacle sensing; the GX8 Pyro which is Nepal’s first cinema-grade cinelifter; and the Aether Zoom which is a 4K UAV camera designed for tactical, industrial, or reconnaissance missions.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260417150440_d9f36b32e0b4d65dedded3e705aa7bf8769fd72417fc53669e77ce7a32f8ccd1.webp" data-media-id="editor_0" data-image-id="20260417150440_d9f36b32e0b4d65dedded3e705aa7bf8769fd72417fc53669e77ce7a32f8ccd1" data-rendition-name="original" width="960" height="1280" loading="lazy" alt="garudx"></figure>  NO CERTIFICATION The main obstacle to GarudX's growth has been the lack of a national certification system. Permits to use drones are convoluted and require applications to various government agencies. “We miss out on so many international projects, for national park footage for example, since there is no way to get our drones registered — even after the army thoroughly checks our craft,” says Adarsha Raj Bhusal. GarudX says it now has the capacity to export its drones overseas at competitive prices, but Nepal does not have a registration system in place. “We can’t legally ship them,” says Avaya Pokharel, Chief Operating Officer who oversees service and repairs. With a new RSP government in place with an ambitious blueprint for digitisation, things could soon change. Relevant bodies are the Home Ministry, the Civil Aviation Authority and the Ministry of Defence because of privacy, aviation safety and national security issues. “There are meetings going on, and there is hope that progress will be made. Of course we want certification to be easy, but it is hard for the government as they have to understand the technology and what is coming in future,” says Bhusal. Legislation could look like a Remote ID system to register every drone. It could also specify pilot verification, placing limitations on what a pilot can do based on their skill level. It could also look at revising drone policies in the capital. Most of Kathmandu Valley is technically a no-fly zone for drones at present because of the concentration of government buildings, army bases and the international airport flight path. To comply with current regulations, GarudX has focused on lightweight FPV drones: small, nimble craft that can be maneuvered at high speed in tight spaces, operated by a pilot wearing immersive goggles. This results in exciting fast-paced footage, particularly useful for clients like Redbull or vehicle companies. “It feels like you are flying,” testifies Bhusal, who has flown FPV for commercials and movies, and ranks way ahead of runner ups in drone races. His work can be seen @adars_fpv on Instagram. The company has built a community of FPV drone racers, and is working with the government to certify it as a sports competition. It holds race events at colleges in Kathmandu and also consults for FPV events in in India.  <figure><img src="https://publisher-publish.s3.eu-central-1.amazonaws.com/pb-nepalitimes/swp/asv65r/media/20260417150440_43b27b1b6890e47028c5e780c2ed0147a057f625d9d551221ddbd504dc03a356.png" data-media-id="editor_1" data-image-id="20260417150440_43b27b1b6890e47028c5e780c2ed0147a057f625d9d551221ddbd504dc03a356" data-rendition-name="original" width="923" height="619" loading="lazy" alt="garudx"></figure>  MULTIPURPOSE Drones can be versatile tools, but they are particularly helpful in Nepal and the Himalaya. Powerful drones have been used for the last two years to transport ropes and ladders up Mt Everest to reduce the dangers on the Khumbu Icefall, and to bring trash down. If scaled with many pilots and drones, this could be a complete solution to the Everest trash problem while massively reducing risk to human lives. GarudX has also tested its products in the mountains. A recent blog entry on their website is titled, ‘Flying at 6,120m: What We Learned Testing Drones on Lobuche Peak’. They document the process of using different battery tricks and propellers to see what combination allows for more flight time in the thin, cold air. It is refreshing to see a Nepali company making such progress in a unique industry while also documenting advances.

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