Kathmandu: Nepal government on Wednesday formally approved the withdrawal of the 3 per cent equity tax imposed on private education and health sectors following widespread public criticism.

The Council of Ministers approved the proposal submitted by Finance Minister Swarnim Wagle to waive the 3 per cent Education and Health Equity Fee under Section 18(1) of the Finance Act, 2083, cabinet sources said.

The Cabinet formally endorsed the complete waiver of the levies.

The decision to scrap the tax follows growing public outcry against the newly introduced levy.

In a social media post on Tuesday, Prime Minister Balendra Shah said the government has decided not to implement the equity tax on private education and health sectors "for now".

The three per cent levy was introduced last month in the budget for the new fiscal year and came into effect from July 17.

Shah said the tax was introduced to expand the tax base and make the economy more organised. However, the government took note of the public response and decided to suspend its implementation.

This report was published from a syndicated wire feed. Apart from the headline, the EdexLive Desk has not edited the copy.