The government has made Permanent Account Number (PAN) registration mandatory for Indian citizens operating businesses in Nepal, bringing thousands of small-scale enterprises into the country’s formal tax system.
For decades, many Indian nationals have been engaged in businesses such as tea and betel shops, barber salons, fruit and vegetable trading, electrical repair services, and other small enterprises across Nepal. A significant number of these businesses have been operating outside the tax net.
A Permanent Account Number (PAN) is a unique taxpayer identification number that remains valid throughout an individual’s or business entity’s lifetime, regardless of changes in address, business location, or other personal details.
According to Keshav Raghubanshi, Information Officer at the Inland Revenue Department (IRD), Indian nationals can now obtain a PAN through a simplified process. Applicants can receive a personal PAN by submitting a valid identity document, including an Indian ration card or a recommendation letter issued by the Embassy of India in Kathmandu.
Officials say obtaining a PAN will enable Indian entrepreneurs to legally operate their businesses, fulfill tax obligations, access banking and financial services, and conduct business transactions more efficiently.
The Inland Revenue Department has introduced the provision as part of its broader effort to bring Indian-operated businesses under the country’s tax framework. Authorities believe the move will not only improve tax compliance and government revenue collection but also provide business owners with formal recognition within Nepal’s regulatory system.
The mandatory registration is part of the government’s “One Person, One PAN” policy, introduced through the Fiscal Year 2019/20 budget. The initiative seeks to expand the tax base by ensuring that all individuals engaged in income-generating activities—including small traders, self-employed workers, and daily wage earners—are registered within Nepal’s formal taxation system.
Officials say the measure is expected to strengthen tax administration, improve transparency in the informal sector, and promote greater accountability among businesses operating in Nepal.
