Finance Minister Swarnim Wagle announced this week that Nepal will scrap 15 outdated acts and dissolve the Department of Revenue Investigation, marking the most aggressive regulatory overhaul in a generation.
The laws being repealed read like a museum of economic paranoia: the Black Marketing and Some Other Social Offences and Punishment Act, the Foreign Investment Prohibition Act, the Import-Export (Control) Act. These are laws from an era when Nepal feared the outside world would devour it, so it built walls instead of bridges.
According to Lagani Lab, which analyzed the implications, the reforms aim to remove procedural complexities and foster a private sector-friendly environment. Translation: Nepal is finally admitting that decades of bureaucratic harassment masquerading as regulation has strangled growth.
Take the Revenue Leakage (Investigation and Control) Act. In theory, it prevented tax evasion. In practice, it gave officials discretionary powers to harass businesses, demand bribes, and create the kind of uncertainty that makes investors run for the exits. The Department of Revenue Investigation, now being dissolved, was notorious for exactly this.
The Black Marketing Act was equally problematic. Originally designed to prevent hoarding during shortages, it became a weapon against any business that succeeded too much. Price too high? Black marketing. Supply too limited? Black marketing. The law was so vague it could mean anything, which made it perfect for corruption.
Rajesh Khanal, who runs a trading company in Kathmandu, told reporters he's cautiously optimistic. "For years we've dealt with inspectors who interpret laws however they want. If these reforms mean predictable rules and less harassment, it's transformative."
But the boldest move is scrapping the . Nepal has spent decades keeping foreign capital at arm's length, terrified of exploitation. The result? Chronic underinvestment, crumbling infrastructure, and young Nepalis fleeing abroad for opportunity. liberalized in 1991 and grew into a $3.7 trillion economy. Nepal stayed closed and stayed poor.
