Local Government’s Tax Practices From A Cooperative Federalism Perspective


  • Raj Kumar Dhungana Kathmandu University, School of Education
  • Keshav Kumar Acharya GIZ- German Development Agency




federalism, fiscal governance, tax, revenue, local government, Nepal


This study analyses intergovernmental revenue policies and its practices in Nepal, specifically focusing on the role of local governments (LGs) in tax administration. Both qualitative and quantitative data were used in this study that concluded LGs are gradually institutionalising internal revenue bases, and rates at the local level. The constitution 2015 has provisioned that the local governments can autonomously execute various functions including legislative, administrative, financial management, tax administration and so on. Nonetheless, imperfect experience, inadequate technical skills, limited legal and procedural grounds, and weak institutional capacity, LGs are collecting tax. Result shows tax enforcement process has been implemented with limited consultation with the taxpayers and minimal coordination with the provincial and federal government. This has created number of criticisms to the LGs about their unaccountability to the taxpaying citizens. Thus, some recommendations such as integration of technical management capacity with local, provincial, and federal level for efficient fiscal administration systems; and digitization and automation of taxation for intergovernmental cooperation have been provided for improving local economic and effective tax administration at the local level.

Author Biographies

Raj Kumar Dhungana, Kathmandu University, School of Education

Raj Kumar Dhungana is development professional with more than 2 decades of experiences in the bilateral, multilateral, government, and civil society organizations in good governance, education, peacebuilding, capacity development, and program management. He holds PhD from Kathmandu University. His research interests are on governance, peace and education. He is currently working in Royal Norwegian Embassy and teaching development policy and planning as a visiting faculty member of Kathmandu University.

Keshav Kumar Acharya, GIZ- German Development Agency

Keshav K. Acharya is Governance Advisor of Capacity Development Support to Governance Project of GIZ Nepal. His main interest areas are federalism, local governance, public policy, capacity development, regional/urban planning, service delivery, peacebuilding, community development, and disaster management. He holds PhD from the University of New England, Australia and MSc from the Asian Institute of technology of Thailand. Dr. Acharya as a development expert worked in different positions of multilateral and bilateral organisations for more than 20 years. Additionally, he has written some books, articles and research papers, which are published in peer-reviewed international journals and book chapters.


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How to Cite

Dhungana, R. K., & Acharya, K. K. (2021). Local Government’s Tax Practices From A Cooperative Federalism Perspective. Nepal Public Policy Review, 1, 157–178. https://doi.org/10.3126/nppr.v1i1.43440



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