The paper calculates and examines the effective burden of the corporate tax in Nepal over the
period 1975 – 2000. The paper finds that the statutory tax rate is not the only factor that
affects the burden of tax. Rather, inflation and many other variables affect the burden of tax
borne by the capital income. Additionally, while the effective tax rate has gone down
significantly over the last 25 years, the paper finds that the effect tax rate for debt-financed
project have increased.